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Leaders’ perceptions of how learning and

development affects organisational performance: are

size and sector moderators?

by

Solomon O. Akrofi

A thesis submitted to the University of Southampton in partial fulfilment

of the requirements for the degree of Doctor of Philosophy

University of Southampton

April 2013

Declaration of Authorship

I, Solomon O. Akrofi declare that the thesis entitled:

Leaders’ perceptions of how learning and development affects organisational

performance: are size and sector moderators?

and the work presented in the thesis is my own, generated by me through my

own original research. I confirm that:

this work was done wholly or mainly while in candidature for a research

degree at this University;

where any part of this thesis has previously been submitted for a degree or

any other qualification at this university or any other institution, this has been

clearly stated;

where I have consulted the published work of others, and this is always

clearly attributed;

where I have quoted from the work of others, the source is always given.

With the exception of such quotations, this thesis is entirely my own work;

I have acknowledged all main sources of help;

where the thesis is based on work done by myself, jointly with others, I have

made clear exactly what was done by others and what I contributed myself;

and

part of this work was published before submission.

Signed Solomon O. Akofi…………………………………………………………….

Date 12th June, 2013 ……………………………………………………………….

2

Acknowledgements

"History has demonstrated that the most notable winners usually encountered

heartbreaking obstacles before they triumphed. They won because they refused to

become discouraged by their defeats". Bertie C. Forbes

Working towards the fulfilment of my doctoral research was a thoroughly

challenging but fulfilling experience, for which I would like to express my gratitude

to a number of people.

First, I would like to thank my Lord and Saviour Jesus Christ for granting me the

grace, strength, and motivation to remain focused in spite of many obstacles that

emerged during this work.

My very special appreciation and gratitude goes out to my two supervisors at

Southampton University, Prof Nicholas Clarke and Dr Guy Vernon for their

invaluable suggestions and guidance throughout this research. I would like to thank

them for all their ideas and suggestions that contributed to refining the theoretical

rigour of this research.

I also like to acknowledge the priceless support, motivation, and sacrifices of my

wife and children throughout this project.

I am immensely indebted to my parents for all the efforts and investments they made

in my education, which laid the foundation for this work.

I would also like to make a special mention of the following people who have made

significant contributions to my life: Mr & Mrs Simpey, Mr & Mrs Ntow, Mr & Mrs

Boadi, and Mr Rexford Pianti-Amoa.

Finally, I extend my gratitude to various individuals who offered me advice, which

helped shape and refine the questionnaire during the piloting phase of the research;

my heartfelt gratitude is extended to all the executives who participated in the

research as well as my loyal friends who continually encouraged me along the

journey.

3

Dedication

To the King immortal, invincible the only wise God, be glory, honour, and majesty.

I also dedicate this work to the most important people in my life – my charming wife,

superb children, and loving parents.

4

Abstract

An extensive search of the literature revealed that only a few studies (e.g. Mabey and

Ramirez, 2005) have examined the effects of executive development on

organisational outcomes. Furthermore, it has been postulated that limited measures

of executive and leadership development exist (Collins, 2002), and therefore, based

on Luoma’s (2006) model of management development, an integrated measure is

constructed in this research.

In addition, this research advances an empirical examination of the relationship

between a measure of executive learning and development (L&D) and a composite

perceptual organisational performance measure (financial, market share, customer

satisfaction, innovation, and employee engagement). Executive L&D is hypothesised

to affect organisational performance on the basis of a number of interrelated

theoretical concepts: Resource-Based View (Barney, 1991; Barney, 2001; Clulow et

al., 2007), Dynamic Capabilities (Chien and Tsai, 2012; Eisenhardt and Martin,

2000; Zott, 2003), Human Capital (Rastogi, 2002; Ulrich, 1997; Wright et al. 2001)

and Resource Dependency (Pfeffer, 1972; Pfeffer and Salancik, 1978; Hitt and Tyler,

1991; Hillman, 2005).

Furthermore, drawing on the Resource-Based View (Barney, 1991; Barney, 2001;

Clulow et al., 2007) and Resource Dependency (Pfeffer, 1972; Pfeffer and Salancik,

1978; Hitt and Tyler, 1991; Hillman, 2005) theories, it is hypothesised that

differences in firm size will have a bearing on the effects of executive L&D on

organisational performance. Based on empirical research findings on learning

orientation differences across sectors (e.g. Hyland et al., 2000; Taylor and Bain,

2003; Wright and Dwyer, 2003; Dymock and McCarthy, 2006; Lee and Tsai, 2005;

Khadra and Rawabdeh, 2006; Lee-Kelly et al., 2007), it is hypothesised the effects of

executive L&D on organisational performance will differ across sectors (service

versus industry).

Initial validation of the executive L&D measure was based on data from a sample of

150 executives. Subsequently, data was collected from 222 organisational leaders

across several geographic regions (Europe, USA, Africa, Asia, Australia) to allow

further validation of the measure and to test the relations between executive L&D

5

and organisational performance (profitability, market share, innovation, employee

engagement, and customer satisfaction).

The results derived from ordinal regression analysis suggest that organisations that

implemented executive L&D practices tended to show improved organisational

performance. The positive effects of strategic, experiential, participative, and

structured executive L&D dimensions on the composite measure of organisational

performance underscores the contribution of both formal and informal learning to

organisational outcomes.

Firm sector and size characteristics were also found to modify the organisational

performance effects of executive L&D. Specifically, industry firms produced better

performance effects of executive L&D than their service counterparts. In terms of

firm size, Non-SMEs produced better effects of executive L&D on organisational

performance than SMEs.

An important practical implication emerging from this result is that HRD

practitioners may have to align executive L&D to firm size and sector characteristics.

Importantly, the research offers theoretical extension to the Resource-Based View

and Resource Dependency concepts of the firm. From the practical perspective, the

amalgamation of executive L&D dimensions into a broad measure (reflecting

ambidextrous learning), offers a unique nexus of both concepts with practical

implications. Specifically, this suggests that HRD practitioners and senior executives

need to account for a wide range of learning (formal and informal) dimensions when

designing and implementing executive L&D. The results of this research provide

theoretical extension for a number of theories: Resource-Based View, Human

Capital, Resource Dependency, Knowledge-based, and Dynamic Capability, given

the positive effects of executive L&D on organisational performance.

To conclude, this research provides an integrated measure of executive L&D, which

can be applied across different firm sectors/sizes to drive organisational performance.

6

Table of Contents

Declaration of Authorship............................................................................................... 2

Acknowledgements......................................................................................................... 3

Dedication ....................................................................................................................... 4

To the King immortal, invincible the only wise God, be glory, honour, and

majesty. ........................................................................................................................... 4

I also dedicate this work to the most important people in my life – my charming

wife, superb children, and loving parents. ...................................................................... 4

Abstract ........................................................................................................................... 5

Table of Contents ............................................................................................................ 7

List of Tables ................................................................................................................ 11

List of Figures ............................................................................................................... 12

Chapter One: Introduction ............................................................................................ 13

1.0 Rationale behind the Research ......................................................................... 13

1.1 Unique Contributions ....................................................................................... 18

1.2 Research Aim and Objectives .......................................................................... 18

1.3 Research Structure............................................................................................ 20

Chapter Two: Literature Review................................................................................... 22

2.0 Definitions of Management and Executive Development................................ 22

2.1 Definitions of Leadership Development .......................................................... 34

2.3 Dimensions of Management and Executive Development .............................. 40

2.4 Informal Learning and Executive Development .............................................. 54

2.5 Models of Management and Executive Development...................................... 59

2.6 Theoretical Conception of an Integrated Executive L&D Measure................. 62

2.7 Theoretical Justification Underpinning the Expected Effects of Executive L&D

on Organisational Performance .............................................................................. 66

2.7.1 Human Capital Theory......................................................................... 67

2.7.2 Resource-Based View Theory .................................................................. 69

2.7.3 Dynamic Capability Theory...................................................................... 71

2.7.4 Resource Dependency Theory .................................................................. 75

2.8 Theoretical Justification for Size and Sector Differences of the Executive L&D

Effects on Organisational Performance.................................................................. 78

7

2.8.1 Firm Sector Differences ............................................................................ 78

2.8.2 Firm Size (SME/Non-SME) Differences .................................................. 80

2.9 Executive and Leadership Development and Organisational Performance ..... 83

2.10 Organisational Performance Measurement .................................................... 95

2.11 Conclusions and Development of a Conceptual Research Model.................. 97

Chapter Three: Research Methodology & Data Analysis............................................. 99

3.0 Introduction ...................................................................................................... 99

3.1 Research Hypothesis and Framework ............................................................ 100

3.2 Executive L&D Measures .............................................................................. 105

3.3 Organisational Performance Measures........................................................... 106

3.4 Control Measures............................................................................................ 107

3.5 Research Design and Strategy................................................................... 116

3.5.1 Positivism versus Interpretivism....................................................... 116

3.5.2 Inductive versus Deductive ..................................................................... 117

3.5.3 Research Design...................................................................................... 118

3.5.4 Research Approach ................................................................................. 119

3.5.5 Research Strategy.................................................................................... 119

3.6 Samples Description and Data Collection Procedures ................................... 120

3.7 Sample Description and Demographics ......................................................... 122

3.8 Quantitative Data Analysis Procedures .......................................................... 125

Data Analysis Part 1 – Instrument Development........................................................ 127

3.9 Instrument Development: Executive L&D Measure...................................... 127

3.9.1 Pre-Testing of the Executive L&D Measure........................................... 134

3.9.2 Exploratory Factor Analysis ................................................................... 134

3.9.3 Results of Exploratory Factor Analysis Results ..................................... 136

3.9.4 Confirmatory Factor Analysis...................................................................... 151

3.9.5 Results of Confirmatory Factor Analysis................................................ 151

3.9.6 Discriminant Validity Analysis............................................................... 154

3.9.7 Discriminant Validity Analysis Results and Discussion......................... 155

Data Analysis Part 2 – Effects of executive L & D on organisational

performance ................................................................................................................ 158

3.10 Ordinal Regression Analysis ........................................................................ 158

8

3.10.1 Goodness of Fit and Test of Significance ............................................. 159

3.10.2 Procedures for testing Hypothesis H1: Executive L & D will generate

positive effects on organisational performance measures................................ 160

3.10.3 Procedure for testing Hypothesis H2: Executive L & D effects on

organisational performance will vary by sector (service and industry) ........... 161

3.10.4 Procedure for testing Hypothesis H3: Executive L & D effects on

organisational performance will differ by firm size (SME / Non-SME) ......... 161

3.10.6 Common method variance .................................................................... 162

3.10.7 Results of Common Methods Bias Test................................................ 163

Chapter Four: Results.................................................................................................. 165

4.0 Introduction...................................................................................................... 165

4.1 Results of executive L & D effects on organisational performance (N=222) 165

4.1.1 Summary of results for Hypothesis H1: executive L & D will generate

positive effects on organisational performance................................................ 172

4.2 Results for the Executive L & D effects on organisational performance (service

sector, N=149) ...................................................................................................... 173

4.2.1 Summary of results for executive L & D effects on organisational

performance for the service sector ................................................................... 179

4.3 Results of the executive L & D effects on organisational performance

(industry sector, N=73) .................................................................................... 179

4.3.1 Summary of results for executive L & D effects on organisational

performance for the industry sector ................................................................. 185

4.4 Results of the executive L & D effects on organisational performance (SME

firms, N=68)..................................................................................................... 186

4.4.1 Summary of results for executive L & D effects on organisational

performance for the SME firms ....................................................................... 192

Table 4.9: Summary of the significant predictors of executive L & D on

organisational performance for SME firms ................................................................ 192

4.5 Results of the executive L & D effects on organisational performance (Non-

SME firms, N=154) .............................................................................................. 192

4.5.1 Summary of results for executive L & D effects on organisational

performance for the non-SME firms ................................................................ 199

4.6 Conclusions and summary of hypotheses ...................................................... 200

Chapter Five: Discussion ............................................................................................ 202

9

5.0 Introduction........................................................................................................... 202

5.1 Part One: Discussion of Results – Executive L & D effects on

organisational performance (Total Sample, N=222) ............................................ 202

5.2 Part Two: Discussion of Results Related to Sector Differences (Service versus

Industry) ............................................................................................................... 212

5.3 Part Three: Discussion of Results Related to Firm Size Differences............. 216

Chapter Six: Conclusions............................................................................................ 220

6.0 Introduction...................................................................................................... 220

6.1 Achievement of objectives.................................................................................... 220

6.2 Research Contribution........................................................................................... 221

6.3 Implications for Practice ....................................................................................... 223

6.4 Research Limitations ...................................................................................... 227

6.6 Recommendations for Future Research.......................................................... 227

References................................................................................................................... 230

Appendix A – Summary of Traditional Measures of Training and Development...... 304

Appendix B – Phase 1 Questionnaire (N150)............................................................. 315

Appendix C – Phase 2 Questionnaire (N222)............................................................. 323

Appendix D – Summary of original, revised and new questionnaire items ............... 331

10

List of Tables

Table 2.1: Management and Executive Development Dimensions ........................... 47

Table 2.2: Summary of Selected Studies Evaluating Impact of Executive and

Leadership Development on Organisational Outcomes (2000–2011) ....................... 88

Table 3.1: Demographics of Sample 1 (Data Collected: December 2009–March

2010)……………………………………………………………………………….122

Table 3.2: Demographics of Sample 2 (Data Collected: April–November 2011)... 124

Table 3.3: Pre-Factor Analysis Items included in the Executive L&D Measure..... 133

Table 3.4: Results of Reliability Analysis................................................................ 141

Table 3.5: Results of Rotated Pattern Matrix for Direct Oblimin Rotation using

Maximum Likelihood Analysis ............................................................................... 143

Table 3.6: Communalities Table for Oblimin Extraction Rotation using Maximum

Likelihood Analysis ................................................................................................. 143

Table 3.7: Results of Rotated Component Matrix for Varimax Rotation by Principal

Component Analysis ................................................................................................ 144

Table 3.8: Communalities Table for Varimax Rotation using Principal Components

Analysis.................................................................................................................... 146

Table 3.9: Exploratory Factor Analysis Item Communalities and Inter-item Statistics

.................................................................................................................................. 148

Table 3.10: The Final 14-Item Executive L&D Measure ........................................ 150

Table 3.11: Confirmatory Factor Analysis Results.................................................. 154

Table 3.12: Discriminant Validity Results............................................................... 156

Table 3.13: Inter-item and Item-total Correlation between Observed Items of

Executive L&D Measure ......................................................................................... 157

11

List of Figures

Figure 2.1: Summary of the Evolution of Leadership and its Implication on

Leadership Development (Source: Day and Harrison, 2007) .................................... 37

Figure 2.2: Louma’s Model of Management Development......................................... 1

Figure 2.3: Initial Research Model and Framework .................................................. 98

Figure 3.1: Conceptual Framework Testing the Effects of Executive L&D on

Organisational Performance Measures, Controlling for Individual, Firm Level, and

Environmental Factors……………………………………………………………..1

Figure 3.2: Summary of Quantitative Data Analysis Procedures ................................ 1

12

Chapter One: Introduction

1.0 Rationale behind the Research

In the turbulent and dynamic business environment in which modern firms operate,

the capacity to maintain superior performance, competitiveness, and crucially, long-

term organisational stability is becoming far more challenging now than ever

(Gavetti, 2005; Agarwal and Helfat, 2009; Mellahi and Sminia, 2009). This situation

is compounded by the fact that most organisations have to deal with numerous

challenges, some of which include increased agility, flexibility, and adaptability to

heterogeneous customer needs and demonstrable responsiveness to wide stakeholder

issues (Khatri, 2000; Collier et al., 2005).

Against this background, many organisations consistently explore a broad range of

avenues, strategies, resources, and capabilities to drive superior organisational

performance and survival (Jimenez and Sanz-Valle, 2006). In seeking to leverage

competitiveness and overall corporate performance, firms have advanced a plethora

of ideas to achieve their organisational performance outcomes. One the key avenues

pursued by organisations is executive development and learning, but there appear to

be scant measures for this construct (Collins, 2002).

Certain challenges have actually hindered the progress in the development of an

integrated executive and management development measure. Some researchers in the

field hold the view that management learning and development (L&D) is a complex

multidimensional phenomenon influenced by many variables, which renders them

difficult to assess (Burt and Ronchi, 2007).

In addition, some of these variables are often perceived to consist of an intricate web

of culture and power-based, structural, and micro-political factors that influence the

priority, impact, content, and significance of development dimensions undertaken by

organisations (Mabey & Finch-Lees, 2008; Western, 2008). Therefore, L&D at the

executive level is conjectured to be situated within a socio-political context of power

relations and informal socialisation processes, transcending predictable

considerations (Lim and Johnson, 2002; Rodan and Galunic, 2004; Anderson, 2007;

Sheehan, 2012).

13

Considering such complications, some of the traditional training and development

assessment processes and tools are likely to become inadequate in terms of

predicting or analysing the effective deployment of executive L&D. The main

limitation of such traditional training and development assessment tools is the

overreliance on oversimplified measures, such as the number of training days (e.g.

Wright et al., 2003; Guest et al., 2003), which may well be useful in terms of

workforce planning and forecasting the training budget for staff at the lower echelon

(Appleyard and Brown, 2001; See Appendix A for a summary of studies on some of

the traditional measures of training and development). However, such measures may

be inadequate in predicting and analysing the effective deployment of executive

L&D within organisations.

The lack of an integrated strategy for executive L&D can also be attributed to the

plethora of research, advancing different aspects of the subject. Mabey and Finch-

Lees (2008) outline four main discourses or strands of research in management

development – dialogic, critical, constructivist, and functionalist – and these can be

extended to the domain of executive L&D. The dialogic approach offers a

mechanism that enables organisations to construct a dynamic and negotiated identity.

Research domains under this strand of research encompass management

development discourses and issues regarding organisational identity construction and

deconstruction.

In contrast, critical management development research tends to focus on the

preservation or the transformation of the balance of power within organisations and

the functions of management development. Within this strand, the research examines

how management development influences resistance to order, predictability, control,

domination, and subordination in organisations.

Research domains associated with the constructivist approach focus on the modes of

management development and their outcomes and the cultural significance of

management development within organisations. Furthermore, constructivists view

management development as an enabler of collective learning and self-development

conferring meaning and status to individuals and organisations.

14

Functionalists hold the view that management development encompasses the

development of skills, competencies, and capabilities required to address

performance gaps as well as optimisation of scarce organisational resources. In

effect, this strand of research tends to focus on formal dimensions and general

evaluation studies.

It can be argued that while these different research strands have led to significant

diversity in the field of management L&D, this trend has perhaps hindered the

development of comprehensive executive learning measures. This is because, to the

disadvantage of specific perspectives, researchers have advanced approaches that are

rather generic and likely to address issues related to the top echelon and senior

executives.

In addition to the abovementioned issues, within the field of human resource

development (HRD), Wang and Spitzer (2005) decry the overall lack of emphasis on

measuring and evaluating studies within the domain of HRD empirical research.

They call for cross-disciplinary and comprehensive measures underpinned by theory-

building research approaches in contrast to the practice-oriented, atheoretical, and

process-driven operational methods, which are widely used but have diminishing

usefulness in today’s conditions.

Further challenges faced in terms of measuring executive human capital perhaps

relate to the degree of autonomy, decision-centeredness, and the unpredictable nature

of executive work (Miller and Hart, 2001). In essence, these characteristics may

render any executive L&D metric quite difficult to construct.

Consequently, many organisations either fail to measure the impact of executive

L&D entirely or simply resort to simplistic measures such as the number of training

days and cost expended per head (e.g. Lee and Miller, 1999; Horgan and Muhlau,

2006; Horgan and Muhlau, 2006; Way, 2002). Nevertheless, the question then arises

whether such measures of L&D are equally applicable and relevant to executives,

compared to employees in the lower organisational echelon. Given the critical role

that executives play in organisations, in terms of making strategic decisions, risk-

taking, and driving innovation (Beeson, 2010; Charan et al., 2011) to maintain

organisational survival, empirical research examining the effects of an integrated

15

measure of L&D on organisational performance will provide useful insight to both

academicians and practitioners.

In addition, a review of the literature on the effects of organisational leadership and

executive development revealed that very few evaluative studies have been

conducted in this field (e.g. Mabey and Ramirez, 2005).

Consequently, this research aims to address the identified gaps in literature. First, a

measure of executive L&D is formulated based on Luoma’s (2006) model of

management development, reflecting an integrated approach with four dimensions:

strategic, experiential, participative, and structured.

An empirical examination of the relationship between executive L&D and a

composite perceptual organisational performance (financial performance, market

share, customer satisfaction, innovation, and employee engagement) is conducted.

The hypotheses that executive L&D will affect organisational performance is

formulated, drawing on a number of interrelated theoretical concepts: Resource-

Based View (Barney, 1991; Barney, 2001; Clulow et al., 2007), Dynamic

Capabilities (Chien and Tsai, 2012; Eisenhardt and Martin, 2000; Zott, 2003),

Human Capital (Rastogi, 2002; Ulrich, 1997; Wright et al. 2001), and Resource

Dependency (Pfeffer, 1972; Pfeffer and Salancik, 1978; Hitt and Tyler, 1991;

Hillman, 2005).

The examination of size effects is based on the Resource Dependency and Resource-

Based View theories. Organisational size has been found to be correlated with

innovation and performance (Damanpour, 1992), and this relationship is moderated

by organisational slack (Bowen, 2002). According to Bourgeois (1981), slack relates

to the resources in reserve that permit the adaptation of changes in strategy when

environmental shifts occur. Larger organisations are perceived to have more slack

and are therefore expected to cope better with resource scarcity than small- and

medium-sized enterprises. Some of the effects of resource dependency and slack may

apply to executive L&D contexts, given that large firms may have the extra resource

capacity to deploy highly sophisticated development approaches when environmental

changes occur, compared to small firms (Mole et al., 2004). Furthermore, large

organisations have the capacity to hold power over their supplier chains and can

16

establish sophisticated learning partnerships to create differentiated products, thereby

obtaining a competitive advantage (Raymond and St-Pierre, 2004; Gardet and

Mothe, 2012) over small firms. In addition, according to the Resource-Based View

(Barney, 1991; Teece et al., 1997; Winter, 2003; Teece, 2007), firms with superior

resources are likely to pursue unique strategies, which are not easily replicable and

imitable by competitors. Compared to SMEs, large firms are expected to have the

capacity to gain access to such unique resources (Winter, 2003; Teece, 2007).

Therefore, based on the Resource-Based View, it is expected that the effects of

executive L&D effects on organisation performance are expected be better in large

firms than in SMEs as the latter lack the resources required to pursue unique

strategies, which are not easily replicable and imitable by competitors.

Sector effects of executive L&D on organisational performance are also examined in

this study. Some scholars have suggested that learning orientations differ across

industrial sectors (Lee-Kelly et al., 2007). According to Lee and Tsai, (2005).

Learning orientation is a mechanism that affects a firm’s ability to challenge old

assumptions and facilitate new techniques and methodologies. Baker and Sinkula

(1999) view learning orientation as the combination of mental models (Geus, 1998)

and dominant logics (Bettis and Prahalad, 1995) that are likely to influence a firm’s

learning behaviour.

Several authors (e.g. Hyland et al., 2000; Dymock and McCarthy, 2006; Khadra and

Rawabdeh, 2006) have emphasised on the importance of learning orientation in the

manufacturing sector, and particularly, leadership is considered to be a crucial

enabling agent for learning in the manufacturing sector (Yeo, 2008). Furthermore,

Datta et al. (2005) examined how industry characteristics affect the relative

importance and value of high-performance work practice (HPWP) systems and

reported that the impact of human resource systems on productivity is influenced by

industry capital intensity, growth, and differentiation. Their results further suggested

that the effects of HPWP on labour productivity were greater in industries with low-

capital intensity or high-growth rates and that such industries are likely to include

sectors characterised by a combination of high discretionary behaviour and customer

contact, which are all features of the service sector.

17

However, increased applicability of HPWP in the service sector is not universally

supported. Comb et al. (2006), in their meta-analysis of 92 studies, found that many

studies supported increased applicability of HPWP in the manufacturing

organisations compared to in their service counterparts, but the impact of this on

performance measures across the sectors was found to be invariant.

It is expected that the effects of firm size and sector differences in executive L&D

will be observed on organisational performance, owing to the differences in learning

orientation across sectors, as cited by scholars (Hyland et al., 2000; Taylor and Bain,

2003; Wright and Dwyer, 2003; Dymock and McCarthy, 2006; Lee and Tsai, 2005;

Khadra and Rawabdeh, 2006; Lee-Kelly et al., 2007).

1.1 Unique Contributions

The unique contributions of this research can be summarised in three main points.

Firstly, this research presents an integrated measure of executive L&D and evaluates

the effect of the measure on organisational performance, in response to the gap

identified within literature for such integrated measure of executive and leadership

development (Weiss and Molinaro, 2006) and the limited number of studies

evaluating the effects of such measure on performance (Collins, 2002). Secondly, the

differential effects of executive L&D by firm size are evaluated to confirm the

Resource Dependency and Resource-Based View effects. Finally, the effects of

differences in learning orientation on organisational performance are examined, to

contribute to this emerging field.

1.2 Research Aim and Objectives

The research aims to enhance the knowledge and understanding of the effects of

executive L&D on organisational performance by drawing on a number of theoretical

concepts: Resource-Based View, Dynamic Capability, Resource Dependency, and

Human Capital. The outcome of the research will offer new insight to practitioners

and researchers interested in advancing the capacity for executives and leaders to

optimise organisational performance outcomes through L&D. Specifically, the main

objectives of the research are:

18

1. To develop an integrated executive L&D measure, encapsulating both formal and

informal dimensions

2. To evaluate the effects of executive L&D on organisational performance

3. To evaluate the possible moderating effects of firm size and sector on the

relationship between executive L&D and organisational performance

Additionally, the research objectives can be classified into theoretical, practical, and

academic criteria as follows:

From a theoretical perspective, the research attempts to examine the effects of

executive L&D on organisational performance variables, drawing on a number of

theoretical concepts: Resource-Based View, Dynamic Capability, Resource

Dependency, and Human Capital. The moderating effects of sector are examined to

determine the impact of learning orientation (service versus industry) on the

relationship between executive learning and organisational performance. In addition,

firm size effects are examined, in light of the Resource-Based View and Resource

Dependency, on the relationship between executive learning and organisational

performance.

From a practical perspective, it is noteworthy that organisations invest in substantial

resources for developing executive capabilities and will consequently be interested in

the performance effects of such investments. In addition, from the firm size

perspective, (SME versus Non-SME) organisations may be interested in

understanding whether specific executive L&D dimensions can drive organisational

performance better than others. This knowledge can assist SMEs adopt a balanced

view in deploying their scant resources, owing to Resource-Based View and

Resource Dependency implications. This research also investigates the differential

effects of executive L&D on specific organisational performance variables in terms

of sector (service versus industry). This will highlight to HR directors the importance

of factoring in firm size and sector effects in the design of executive L&D

programmes instead of following generic approaches, which may have limited

effectiveness in specific contexts. The resulting measure can also be utilised to

19

benchmark executive L&D against competitors, thereby enabling organisations to

identify and address any competency gaps in order to remain at par with competitors.

This research is one of the few studies presenting executive L&D as an integrated

measure (accounting for formal, informal, organisational, team, and individual

dimensions), reflecting the notion of ambidextrous learning (Benner and Tushman,

2003). Finally, such an integrated measure of executive L&D may be applicable to

other contexts, industries, geographical settings and guide organisations in driving

superior organisational performance effects.

1.3 Research Structure

The thesis is organised into six chapters as follows: Chapter One offers a brief

introduction to the research.

Chapter Two starts by exploring the definitions of executive L&D, from the

organisational perspective, highlighting differences and overlaps between the

constructs of executive and management development. Importantly, the convergence

of both constructs within the organisational context is highlighted. This is followed

by discussions on dimensions and existing models of executive and management

development, culminating with the formulation of a conceptual executive L&D

measure based on Louma’s (2006) model of management development. This section

then presents the theoretical justification for the predicted effects of executive L&D

on organisational performance, based on the Resource-Based View, Human Capital,

Dynamic Capability, and Resource Dependency theories. The justifications for the

expected firm size and sector differences in executive L&D on organisational are

also addressed. This section ends with a review of the literature on the effects of

leadership and executive development on organisation performance, definition of

organisational performance, and the formulation of a conceptual research model.

Chapter Three, which is dedicated to research methods and data analysis, commences

with the development of the research hypotheses and detailed conceptual research

framework. Then, this section addresses methodological issues, including a

discussion on alternative methodologies as well as the justifications for adopting the

survey approach. For clarity, the data analysis section is split into two parts. The first

20

part is dedicate to the design of the executive L&D measure, including procedures

adopted for exploratory, confirmatory, and discriminant validation. The second part

focuses on the justifications for selecting the ordinal regression technique to

investigate the effects of executive L&D on organisational performance and

procedures for confirming and disconfirming the research hypotheses. This section

ends with the rationale behind conducting Harman's common methods analysis and

the specific results for this research.

Chapter Four is dedicated to reporting the results obtained by testing the hypotheses

under ordinal regression analysis procedures and reporting observed changes in the

Chi-square and pseudo R-square values. In addition, significant predictors of

executive development on organisational performance measures are reported for the

overall sample. The moderating effects of firm size (SME versus Non-SME) and

sector (service versus industry) are also reported.

Chapter Five discusses the findings of the research

Chapter Six is devoted to the conclusions of the research, highlighting research

implications, contributions, and limitations as well as proposals for further research.

21

Chapter Two: Literature Review

2.0 Definitions of Management and Executive Development

Executive development has been cited as being the means for driving organisational

stability (Brown, 2003), and several researchers (e.g. Beardwell and Holden, 2001;

Fuller-Love, 2006; Longenecker and Fink, 2001; Scherpereel and Lefebve, 2006)

have emphasised on the fact that to succeed in today’s ever-changing environment,

business executives need to be far more innovative and proactive with regard to

career development now than before.

Like most management terminologies, the word “executive” attracts different

interpretations within organisations and from researchers. This often triggers

ambiguity given the wide spectrum of managers who tend to fall under this category.

Indeed, the range can extend from line managers to the members of the board.

Here, the term applies specifically to senior or top-level managers with strategic and

operational responsibility within their organisations, including CEOs. It is a common

practice within literature for executives, particularly at the top levels to be

collectively classified as members of the top management team – hereafter referred

to as TMT. In addition, the composition of the TMT varies across studies.

Most CEOs are often expected to demonstrate vast experience, expertise, and

dexterity prior to attaining such a significant role within organisations. However,

CEOs may lack the capacity to drive performance unilaterally and consistently

without the input of executives at the top of the organisational hierarchy, especially

in very large and complex firms with multiple operations. In effect, the substantial

experience of the CEO is likely to be augmented by the expertise of a core group of

senior executives when it comes to effectively achieving the strategic vision and

objectives of an organisation (Carpenter, 2002; Ferrier, 2001).

In effect, the collective expertise of the other layers of executives may be required to

drive organisational success in terms of developing, revising, and implementing

strategic activities. Supporting this expansive view of the term executive, Castanias

and Helfat (1991) note that the overall firm performance of organisations is driven by

22

the human capital of the entire TMT rather than the individual abilities of CEOs. In

this research, the term executive will apply to a layer of middle to top managers

including the CEO with operational and strategic responsibilities (Carpenter, 2002;

Carpenter and Fredrickson, 2001; Ferrier, 2001).

Widening the bracket of executives to include members other than the CEO allows

the examination of executive development from a novel perspective. Particularly, as

the interaction between the top and other layers of managers in an organisation may

serve as a catalyst for leveraging learning capabilities and resources to drive

productivity. Shifting the focus from the highest echelon to other layers of executives

complies with the approach of other researchers (Boeker, 1992; Boeker, 1997;

Kazanjian and Rao, 1999; Ferrier, 2001).

Moreover, Litzky and Greenhaus (2007) propose that the term executives signifies a

group responsible for setting long-run priorities and deciding on effective allocation

of resources to achieve long-term organisational goals, through the efficient

utilisation of human, financial, and material resources. Such individuals are therefore

ultimately responsible and accountable for generating profitability within their

organisations or business units.

Interestingly, executive L&D appears to be neglected by some organisations as

evidenced by a 2007 Novations Group study: 90% of first-line managers received

some form of training, whilst only 59% of senior executives secured any form of

development (Management Issues, 2007). This corroborates past research findings

that highlighted that 4 out of 10 senior managers are likely to fail within 18 months

of taking on their new roles (Ellis, 2003).

Nonetheless, this limited focus on executive development highlights not only

organisational apathy but also the fact that executives are sometimes ambivalent

towards training and development, especially when it involves didactic forms of

delivery (CIPD, 2007).

However, other findings of the report suggest that the situation is not completely

dismal. According to the report, executives engage in other forms of activities, which

are normally not classified as formal learning and development. Specifically,

23

managers at the top level often participate in visioning, coaching, strategic planning,

and other endeavours that constitute learning, training, and development, if not

clearly specified as such.

Therefore, delivering executive L&D solely via formal and structured approaches

may reflect a limited configuration of dimensions that generate significant benefits to

organisations and individual executives. On the other hand, whilst there may be valid

reasons behind the disinterest in L&D among certain executives, this reluctance to

continuous development may be a contributory factor to the alarming rate at which

some executives underperform when they take on higher roles.

For instance, it has been reported that almost 40% of US executive underperform in

new roles despite having achieved healthy career progression and demonstrable

records of accomplishment in previous jobs (Davis, 2005).

This issue was highlighted over two decades ago by Kaplan et al. (1985), who

suggested that on attainment of new positions, many executives believe they have

crossed an invisible dividing line and have ascended to a “rarefied atmosphere”,

making it difficult for them to acknowledge that they require continuous self-

development to drive consistent and exceptional organisational performance.

The foregoing observation highlights the fact that sometimes there may be gaps in

the executives’ experiences, competencies, and skills that require bridging through

appropriate development dimensions to drive organisational performance. Indeed,

some of these gaps may be attributable partly to the already highlighted reluctance of

certain executives to engage in formal development activities as they progress to the

top of the organisational hierarchy.

Jackson et al. (2003) outline other possible drivers of such behaviour, namely fear of

change, fear of exposing weaknesses, and a belief among some executives that

learning is no longer relevant to them, as they fail to recognise the potential payoff in

terms of improved personal and organisational performance.

According to Brown (2006), effective deployment of executive development

programmes can influence the strategic efforts of organisations by driving

24

improvements in strategic management competencies of executives, thereby resulting

in efficacious strategy formulation and implementation (including the management

of strategic initiatives). In light of this point, it can be said that L&D particularly

focuses on expanding strategic competencies of executives to help them influence

strategy issues positively.

Arguably, certain features of the executive job scope may offer some useful guidance

to facilitate the design of suitable learning and development strategies for this cohort.

According to Castanas and Helfa (1991), executives organise and direct all activities

of an organisation by developing and implementing strategic and operational

decisions capable of leading to economic benefits, which are non-replicable by

competitors.

Here, the term rent refers to profitability derived from and linked to the effective

implementation of strategic executive decisions, in line with the collective definition

of executives, which is buttressed by Eistenhard et al. (1997), where executives, who

through an inner circle collectively formulate, articulate, and execute the strategic

and tactical decisions, are considered the aggregate informational and decisional

entities that are involved in the operations of an organisation.

As observed by Castanias and Helfat, (2001) the managerial skills required at the

executive level appear to be tacit in nature and involve learning by “doing” with no

clear blueprint; therefore, such skills are quite difficult to replicate quickly. On

linking this notion to the Resource-Based View, it can be stated that such skills

embody a high degree of inimitability and constitute a crucial component of

organisational human capital (Barney, 1991; Barney and Arikan, 2001; Barney,

2001).

In summary, the executive job scope involves complex capabilities, incorporating

strategic focus, effective deployment of multiple information sources and critical

resources, and tactics deployed to achieve long- and short-term organisational

outcomes. This implies that executive L&D must be pitched at the right level, reflect

the correct combination of formal and informal activities, and most importantly,

reflect a strategic focus. Neglecting any of the aforementioned dimensions of

25

executive L&D may render the whole process ineffective and mechanistic,

potentially leading to negative or neutral organisational outcomes.

Supporting this view, Castanias and Helfat (2001) delineate managerial human

capital across a continuum of positions: board; CEO; TMT; and upper, middle, and

lower levels. Moreover, they classified the range of skills of the different levels of

managers as follows: generic, related-industry, industry-specific, and firm-specific;

the related-industry and industry-specific skills are most likely to be of most

relevance to executives considered in this research.

The findings of the research underscore the notion that a one-size-fits-all approach to

establishing L&D may be counterproductive. Consequently, even when specific

development or training is cascaded and deployed within organisations, it may be

necessary to align it to the different expertise and staff levels across the firm.

Developing executive competencies may involve the enhancing of a range of

behavioural, cognitive, and social skills, via diverse learning modes and at

differential rates (Day and Halpin, 2004, Lord and Hall, 2005).

While some of the skills discussed above may be associated with didactic processes,

Lord and Hall (2005) argue that from a sociological leadership viewpoint, the

development needs of executives are mostly leadership oriented, complex in nature,

and require some form of customisation to become sustainable.

It is also important to examine some of the definitional tensions existing in the

literature, focusing first on management development followed by executive

development. This approach may assist in broadening the interpretation and

perspective on such a nebulous but important subject.

Management development is characterised by lack of coherence and agreement and

divergence (Vloeburghs, 1998). The term often attracts multiple and conflicting

definitions and conveys different meanings to practitioners and researchers (Lees,

1992). Conceptualisation of management development, attributed to Storey (1989a,

1989b), relates to its proximity with the purpose of deployment. Hence, management

26

development activities are not ends in themselves but must relate to organisational

objectives.

Further variations in the definitions ascribed to the concept of management

development are outlined as follows:

Molander (1986, p. 76) views it as a conscious and systematic approach to control

the development of managerial resources in the organisation for the achievement of

goals and strategies.

Wexley and Baldwin (1986, p. 287) contend that management development is the

whole complex process by which individuals learn, grow, and improve their abilities

to perform professional management tasks.

According to Storey (1989a, p. 5), management development denotes processes

which engender enhancement of capabilities, with a scope for discretion, creativity,

and indeterminacy.

Mumford (1987, p. 223) views management development as an attempt to improve

managerial effectiveness through a planned and deliberate learning processes.

According to Burgoyne (1988, p. 40), management development is the management

of managerial careers in an organisational context.

For Lees, (1992, p. 90) management development is a term which embraces much

more than education or training. The term denotes an entire system of corporate

activities with the espoused goal of improving the performance of the managerial

stock in the context of organisational and environmental change.

Management development is the complex process by which individuals learn to

perform effectively in managerial roles (Baldwin and Padgett, 1994, p. 277).

Van der Sluis-den and Hoeksema (2001, p. 168) posit that the central challenge of

management development is to control and manage the learning process of

27

managers, by focusing on individual development, career succession, and/or

achieving organisational goals.

Jansen et al. (2001, p. 107) define management development as the system of

personnel practices by which an organisation tries to guarantee the timely availability

of qualified and motivated employees for its key positions. The aim of the

management development is to have at his/her disposal the right type of managers

and specialists at the right moment

Management development is a multi-faceted process, in which some aspects are

easier to identify and measure than others (Thomson et al., 2001, p. 10).

Knox and Gibbs (2001, p. 714) contend that management development is the entire

system of organisational activities principally aimed at improving the performance of

management. These activities include education and training and incorporate

performance appraisal, career and succession planning, assignments, projects, and

other forms of on-the-job development.

According to Brown (2003, p. 292), management development espouses a range of

development dimensions intended to enhance the strategic capability and corporate

performance of an organisation. The use of the word dimension implies a conscious

process which has probably been initiated or stimulated at the corporate level but can

encompass both formal and informal activities.

Management development is an expansion of a person's capacity to be effective in a

manager's role and processes (McCauley and Van Velsor, 2004, p. 2).

Management development includes both the personal and career development of an

individual manager (i.e. attendance at formal development programmes, seminars,

conferences, and informal learning through methods such as coaching and

mentoring, etc.). It also includes management education achieved through formal

undergraduate/postgraduate qualifications (O’Connor and Mangan, 2006, p. 327).

Management development can be defined as a dynamic capability or learned pattern

of collective activity through which an organisation systematically generates and

28

modifies it routine in the pursuit of encouraging and developing managers to balance

efficiency and adaptiveness (Espedal, 2005, p. 138).

The above definitions reflect the diversity of definitions associated with the concept

of management development and offer insight into the breadth and width of the

subject. Some researchers focus on the individual benefits of management

development (Baldwin and Padgett, 1994; Wexley and Baldwin, 1986; McCauley

and Van Velsor, 2004), whilst others (Espedal, 2005; Knox and Gibbs, 2001)

consider a more expansive or holistic view by considering the resulting

organisational impact of management development.

The definition of management development as a dynamic capability by Espedal,

(2005) is supported by other scholars (Chien and Tsai, 2012; Zott, 2003). The

literature on dynamic capability highlights the importance of both learning

mechanisms and knowledge resources (Chien and Tsai, 2012). Prior research has

indicated that knowledge resources can generate dynamic capabilities (Griffith et al.,

2006; Liao et al., 2009) and that learning forms the bridge in the transformation of

knowledge resources into dynamic capabilities (Heijden, 2004).

Learning mechanisms have also been found to enhance dynamic capabilities within

organisations, shedding further light on the evolution of dynamic capability within

firms (Zollo and Winter, 2002). Thus, the notion that executive L&D generates

dynamic capability will be adopted in this work; this will be accounted for in the

selection of measures likely to capture the dynamic capability of executives, which

may be situated in the external and internal work environments.

Another key thread running through the definitions is the frequent reference to

management development as a process (Storey, 1989a, 1989b; Van der Sluis-den and

Hoeksema 2001; Thomson et al., 2001) or system (Lees, 1992; Knox and Gibbs,

2001), with the exception of Brown (2003). Brown’s (2003) view of management

development as encompassing a broad range of dimensions (formal and informal) is

adopted in this research. The broader definition given by O’Connor and Mangan

(2006) accounting for formal and informal learning and development dimensions

aligns with the holistic lens adopted in this research.

29

The diversity in the definitions observed above highlights the need for researchers to

expand executive management L&D measures to encompass wide or holistic

perspectives instead of advancing a simplistic perspective of the concept.

The diversity evident in management development definitions is also an indication of

the broad nature of this subject matter, reflecting a range of activities, such as

education and learning, and workplace dimensions, which could be deliberate or

incidental but can enhance managerial capabilities required for achieving strategic

business objectives. Contrary to the above view, some authors (Haskins and

Clawson, 2006; Longnecker, 2004; Kovach, 2000) subscribe to a rather narrow

definition of executive development, limiting attention mainly to executive education

programmes or activities.

Management education arguably encompasses didactic forms of delivery in which a

body of knowledge is emphasised on, whereas management development tends to

convey practical dimensions of learning, with emphasis on a range of skills.

Although didactic and structured learning delivered through educational settings may

differ in terms of practical development mechanisms, both dimensions may operate

in tandem to enhance managerial capabilities. Managers may actually gain an

enhanced understanding of informal activities after the mastery of theoretical

concepts, principles, and ideas originating from management education and other

forms of didactic learning (Mintzberg, 2004; Lawless et al., 2011).

Some authors (Burgoyne and Reynolds, 1997; Thorne and Wright, 2005) present

management learning as a nexus between the long-established areas of management

education and development in that management learning can be conjectured as a

flexible concept, providing an all-encompassing conceptualisation of the contentious

subjects of management education and development.

O’Conner (2006) states that management development encompasses all development

dimensions, such as personal and career development of an individual manager, that

warrant attendance at formal development programmes, seminars, and conferences

and the use of informal learning techniques such as coaching and mentoring, etc.

30

Management education achieved through formal undergraduate and postgraduate

qualifications are included in this scope.

Further, a distinction is made between the UK approach in which HRD is

“supporting and facilitating the learning of individuals, groups and organisations”

(McGoldrick et al., 2002) and the US approach in which HRD is expected “to

enhance learning, human potential, and a high performance in work-related systems”

(Bates et al., 2001).

Moreover, in the literature, some authors have used the terms executive development

and management development interchangeably (Waldman and Yammarino, 1999;

Jackson et al., 2003). Although both terms are applicable to managers, essentially,

executive development refers to high-level or senior managerial positions. Similarly,

the definition challenges observed in the management development literature extend

to the executive development domain.

For instance, Jackson et al. (2003) define executive development as the provision of

advanced management training and education to matured, motivated, and

experienced managers. In their definition, they emphasise on both university and in-

house programmes, which are focused on executives, aimed at improving individual

performance in current and future career positions.

On the other hand, Vloeburghs (1998) defines executive management development

as a system that enables companies to fill higher and highest executive functions,

which are crucial for organisational continuity. However, both definitions have some

limitations.

Advanced management training and education is a facet of the executive

development and learning process, and therefore, balanced renditions are required to

capture informal learning and development dimensions, and this notion is not

covered in this definition. In addition, Vloeburghs (1998) fails to address the detailed

components of executive development and by merely referring to it as a system,

opens up a conundrum of interpretation and meanings. Focusing exclusively on

succession and continuity dimensions is likely to create a narrow case for deploying

executive development within organisations because other considerations, such as

31

current and future strategy, may well be important considerations for developing

executives. Arguably, such definitions and conceptualisations of development may

be more appropriate for low-level managers than for high-level executives. Thus,

effective deployment of executive L&D may lead to a wide range of benefits

transcending the succession dimensions specified in the above definitions,

particularly effects that translate into organisational success.

On this basis, the definitions advanced by both Vloeburghs (1998) and Jackson et al.

(2003) failed to address the strategic focus of executive development. In contrast,

Brown (2003) defines executive management development as all dimensions

deployed to enhance the strategic capability and corporate performance of

organisations. This definition is probably more reflective of the nature of executive

development at the senior level given the strategic focus, which stresses the

requirement of linking such activities to organisational performance. In essence, the

notion advanced here is that executive development is predicated by a clear strategic

intent of enhancing senior managerial capabilities, aligned with the overall focus of

driving short- and long-term organisational survival.

The abovementioned tensions in the definitions within literature may emanate from a

number of factors. Notably, the fact that “HRD research is characterised by both

ontological uncertainty and methodological hegemony” (Sambrook, 2004), results in

little agreement on what HRD (which encompasses management and executive

development) is or should be (Lee, 2001; McLean, 1998; Swanson, 1999).

Further definitional tensions arise because some researchers (Wiess and Molinaro,

2004) tend to use the terms executive development and leadership development

interchangeably, even when the subject matter examined clearly relates to executive

development.

This observation aligns with views articulated in a CIPD research on executive

development. It was noted that senior managers often wanted to be treated as a

“special case” to reflect their higher status in the organisational hierarchy (CIPD,

2007).

32

In addition, high-level executives often consider development as “leadership” rather

than “management” development. The report stressed that although some TMTs are

more likely to engage in a wide range of L&D dimensions compared to other

employees, four significant factors, status, numbers, isolation, and political skills,

genuinely differentiated them from other employees. These factors are expanded as

follows:

Status: Senior managers are likely to be sensitive to their senior status and even in a

relatively egalitarian organisation; they are likely to perceive their development

needs differently.

Numbers: Often, senior managers are relatively fewer than other group members

within organisations because most organisations retain a pyramidal hierarchy, even if

they have been flattened over the years.

Isolation: Some senior managers may feel isolated in their roles without the presence

of a peer group. Learning may occur in organisations when peers share problems and

discuss solutions in informal settings. However, many senior managers lack these

opportunities, and they may be burdened with significant problems, which cannot be

openly discussed with more “junior” managers. Very senior members, such as CEOs,

feel the loneliness related to the job and others tend to disregard the fact that such

executives are faced with immense pressure on a daily basis.

Political skills: Political skills are essential for the survival of senior managers, and

most organisations would rather not organise courses for senior managers to become

adept corporate politicians. However, some legitimate assistance must be provided to

new senior managers to develop such skills. Political skills are defined as the ability

to understand others at work and to use such knowledge to influence others to act in

ways that enhance personal and/or organisational objectives (Ferris et al., 2005).

Blass and Ferris (2007) assert that political skill represents some degree of personal

learning, which is tacit in nature, encapsulating four underlying dimensions: social

astuteness, interpersonal influence, networking ability/social capital, and apparent

sincerity or genuineness.

33

Excellent lateral relationship between executives is critical for obtaining desired

strategic results and is a common currency of most successful executives (Church

and Waclawski, 2001; Enns and McFarlin, 2003). Indeed, executives devote

considerable time influencing peers to back new initiatives (Enns, et al., 2003;

Zaccaro, 2001). However, such attempts to influence peers may be unproductive

(Williams and Miller, 2002), and such an outcome underscores the potential

importance of providing development dimensions to enable executives perform their

functions effectively in complex environments (Zaccaro, 2001).

2.1 Definitions of Leadership Development

Over the past few decades, a vast portion of the literature on leadership has focused

on leaders, attributes of leaders, and leadership effectiveness; this trend contributes

partly to the lack of conceptual clarity and accurate definition of leadership

development (Olivares, 2008).

A comprehensive distinction between leader and leadership development advanced

by Day (2001) generated the impetus for further progress in the establishment of a

conceptual definition of leadership development. Day (2001) argues that leader

development revolves around the individual and seeks to build intrapersonal

competencies, skills, and abilities, which generate human capital. On the other hand,

leadership development involves "expanding the collective capacity of organisational

members to engage effectively in leadership roles and processes" (Day, 2001, p.

582).

Focusing on the human capital and incremental and social perspectives, Van Velsor

and McCauley (2004) consider leadership development as a human development

process that is situated within the socio-historical context, in that it involves a social

process of building human capital through human networks of trust, commitment,

and interpersonal competencies.

Olivares et al. (2007), supports this view, but expands it to connect leadership

development to the achievement of organisational goals as follows:

34

"Leadership development, as a type of human development, takes place over time; it

is incremental in nature, it is accretive, and it is the result of complex reciprocal

interactions between the leader, others, and the social environment. Leadership

development requires that individual development is integrated and understood in the

context of others, social systems, and organisational strategies, missions, and goals"

(Olivares, 2007, p.79).

Three main ideas can be extracted from the above definitions: leadership

development generates competitive advantage; it is distributive and not an

individualistic process; and development mechanisms need to account for integrative

(individual, team, formal, and informal) dimensions. These views are supported by

other scholars as follows:

Leadership development is thought to involve a range of dimensions which enhance

leadership effectiveness and human capital (Amagoh, 2009), in order to facilitate the

achievement of organisational goals (Vardiman et al., 2006: Bodinson, 2005) and

competitive advantage (Kim, 2007).

Considering leadership development, as "a complex reciprocal interactions between

the leader, others, and the social environment" (Olivares, 2007) aligns with the

distributed leadership perspective (expanded scope of leadership), where the focus

shifts from a few individuals (charismatic and transactional perspective, etc.) to other

layers of leadership within organisations. Therefore, from the organisational context,

this implies that leadership development and leadership need to account for top-level

executives and other layers (i.e. senior and middle managers). Echoing this view,

several scholars argue that leadership development is increasingly critical to

organisational success and development efforts must be spread across all levels (Day,

2001; O’Toole, 2001; Tichy and Cardwell, 2002; Ulrich and Smallwood, 2003;

Leskiw and Singh, 2007).

Hence, in this research, the distributed approach of leadership is adopted, taking into

account CEOs, top executives, directors, senior managers, and middle managers

(Maryrowetz, 2008; Scribner et al., 2001; Temperly, 2009).

35

Martin and Ernst (2005, p. 94), state the following in support of a distributed

approach to leadership development:

“Leadership development efforts must focus on the middle of the organization as this

is where strategic intent and values/norms become permanently melded with

stakeholder (customer, supplier, societal stakeholder) expectations. If developmental

interventions addressing complex challenges are attempted at either the bottom or the

top of the organization, there is a high probability that the very nature of the complex

challenges, the strategic intent, the values/norms, or the resource limitations will be

miscalculated and development will be compromised.”

Other scholars (Weiss and Molinaro, 2006; Marques, 2010), call for an integrated

perspective to leadership development. Such an integrative approach to leadership is

described as “blended learning, advocating this as the best approach to leadership

development” (Bentley and Turnbull, 2005; Voci and Young, 2006).

For example, Weiss and Molinaro (2006), propose an integrated approach to

leadership development, as a means by which organisations can build the capacity to

survive in a competitive environment. They further argue that competitive advantage

is enhanced when organisations follow a strategic, synergistic, and sustainable

approach to leadership development. The integrated approach advocated by them

involves eight steps as follows:

(1) developing a comprehensive strategy for integrated leadership development,

(2) connecting leadership development to the organisation’s environmental

challenges,

(3) using the leadership story to set the context for development,

(4) striking a balance between global enterprise-wide needs with local individual

needs,

(5) employing emergent design and implementation,

(6) ensuring that development options fit the organisation culture,

(7) focusing on critical moments of the leadership lifecycle, and

(8) applying a blended methodology (Weiss and Molinaro, 2006, p. 7).

36

Figure 1.1, summarises the recent development of the definitions and understanding

of leadership and its impact on leadership development, according to Day and

Harrison (2007). Currently, leadership is considered to have gained complexity and

sophistication and has progressed from the most basic (least inclusive and complex)

to the most advanced thinking around leadership (most sophisticated and complex)

(Fig. 2-1, first column). The second column reflects the evolution of the definitions

of leadership, progressing from exclusively role-based authority (most basic) to

influence processes that may include roles (mid-level complexity) to a shared

property of a social system that includes interdependencies of individuals.

Figure 2.1: Summary of the Evolution of Leadership and its Implication on

Leadership Development (Source: Day and Harrison, 2007).

These views have led to the need for integrated approaches to developing leadership

capacity within organisations (Weiss and Molinaro, 2006), with a broadened or

distributed leadership lens (Brown and Gioia, 2002). Such approaches are likely to

promote shared, distributed, collective, or connected leadership capacity in

37

organisations (Cox et al., 2003; Day, et al., 2004). According to Graetz (2000, p.

556), "organisations that are successful in managing the dynamics of loose-tight

working relationships meld strong ‘personalised’ leadership at the top with

‘distributed’ leadership, a group of experienced and trusted individuals operating at

different levels of the organisation. …[Thus ensuring]… integrated thinking and

acting at all levels, particularly at the middle and lower levels of management as they

can act as roadblocks to change, impeding the passage of the change process to those

within their span of control".

In sum, the review of the definitions of leadership development, within the

organisational context, highlight the necessity for advancing measures that account

for individual and team dimensions, external environmental dynamics, predictability

of the future, and are orientated towards the achievement of organisational strategy

and competitive advantage and growth (Doh, 2003; Hartley and Hinksman, 2003;

Boaden, 2006).

Leadership and Executive Development – Different, Overlapping, or Same

Constructs in Organisational Context?

Some scholars differentiate between leadership and management (See seminal

reviews by Kotter, 1990; Alimo-Metcalfe and Alban-Metcalfe, 2002). Alimo-

Metcalfe and Alban-Metcalfe (2002) consider “transformational leadership" to be

equated with leadership and "transactional leadership", with management.

Furthermore, Bedeian and Hunt (2006) suggest that leadership should be viewed as a

subset of management and that both are important for facilitating organisational

performance.

Other scholars (Young and Dulewicz, 2009) consider the two as overlapping and

some (Rees and Porter, 2008) consider management and leadership to be almost

indistinguishable constructs, in the organisational context.

In terms of leadership and executive development, the differences may be almost

indistinguishable, especially when the focus of such activities is on "developing the

leadership human capital and capacity to achieve strategic objectives and competitive

advantage" (Hartley and Hinksman, 2003).

38

In addition, some of the leadership development dimensions (e.g. informal

instruction, work assignments, developmental assignments, on-the-job-training,

executive coaching, action learning assignments, and self-directed learning) cited by

some authors (Day and Zaccaro, 2004; Zaccaro and Banks, 2004; Zaccaro et al.,

2006; Ohlott, 2004; Boyce et al., 2010) have been replicated by researchers in the

field of executive and management development. However, in brief, the

abovementioned dimensions associated with leadership development have also been

referenced to management and executive development (Vicere, 1994; Garavan, 1999;

Mabey, 2004; Gray and Mabey, 2005; Sutaari and Vitala, 2008); these are discussed

in detail in the next section.

Looking at the forgoing discussion, it can be said that executive and leadership

development within the organisational context may be the same constructs that

attract different conceptualisations from researchers.

In sum, within the organisational context, the terms leadership and executive

development can be considered the same constructs, which scholars label differently.

Consequently, in this research the term executive development is adopted to avoid

duplicitous use of the terms executive and leadership development, supporting the

assertion of Kotter (1990) that companies must ignore the literature differentiating

leadership from management within the organisational context.

Summary

Some interesting issues have emerged on reviewing the literature related to the

definitions of executive, management, and leadership development, which are worth

highlighting. First, although conflicting definitions are abundant in the literature on

the subject of management and executive development, the key thread running

through the review is that development dimensions can be classified broadly as

formal and informal and are aimed at developing human capital to drive competitive

advantage in organisations.

Second, whilst some scholars cite differences between leadership and management,

others highlight the overlaps between the two constructs of leadership and

39

organisational development within the organisational context. This suggests that the

perceived differences between the two may be attributed to the particular interest of

scholars.

Last, but importantly, within the organisational context, both leadership and

executive development programmes are advanced to drive competitive advantage

and to improve organisational outcomes. Consequently, in this research, the term

executive covers all organisational leaders who have the capacity to influence the

performance outcomes (Vardiman et al., 2006: Bodinson, 2005).

The next section will focus on reviewing the dimensions and models of executive

and management development with the aim of shaping the conceptualisation of an

integrated measure.

2.3 Dimensions of Management and Executive Development

Tensions are rife among researchers concerning the extant dimensions of effective

management development. These tensions may stem from the already highlighted

diverse definitions of executive and management development. However, it is highly

beneficial for organisations to identify and leverage specific management

development dimensions capable of producing the most significant performance

effects (Longnecker and Nuebert, 2003). Therefore, this section will explore the

various dimensions of executive and management development.

To help identify the various dimensions of executive and management development

advanced by scholars, the changes in the trends and preferences of management and

executive development dimensions will be examined. Vicere et al’s. (1994; 1997)

two longitudinal studies of Fortune 100 companies are among the most cited studies

in this regard. Both studies are based on executive-level respondents and therefore

allow comparability of dimensions as well as track changes in executive

development preferences over a ten-year period. In the initial Vicere et al. study

conducted from 1982 to 1992, the most prominent executive development

dimensions cited in 1982 were performance feedback (48%), followed jointly by

coaching/mentoring and external programmes (37%) and internal programmes

40

(34%). However, in 1992, the emphasis shifted to job rotation (58%), followed by

internal executive development programmes (56%) with special task force and

projects (39%).

The subsequent study by Vicere (1997) revealed further changes in the preferences

for executive development dimensions, where task force and special projects

emerged as the most preferred dimension (68 %), followed by job rotation (64%) and

job training (45%).

The evidence presented above suggests that the emphasis of executive development

delivery mechanisms has gradually shifted from “softer” approaches such as

performance feedback to “harder” action- and work-oriented dimensions such as

special projects. Action-orientated learning may be appealing because of its

association with enhancing both individual and organisational learning (Hudspit and

Ingram, 2002) and its perceived capacity to stimulate the achievement of strategic

objectives (Boshyk, 2002; Loo, 2006). In essence, such learning may be

multiplicative and aggregative in nature as it entails both individual and

organisational components of learning and can therefore be expected to lead to

positive organisational outcomes. This shifting trend is an indication that some of the

current executive development approaches are likely to lose relevance over time

because of technological, socio-cultural, and workplace changes. It is therefore

important for organisations to constantly monitor executive development dimensions

to confirm their relevance and alignment with their strategy.

Besides Vicere et al’s. (1994; 1997) study, other studies follow a similar line of

enquiry but differ in terms of measures and methodology. Most of the subsequent

studies depart from the longitudinal approach and focus on front-line, middle,

executive-level managers, and a combination of these factors.

For instance, Longnecker and Nuebert (2003) elicited the views of middle and front-

line managers in a number of top US organisations on what they considered the top

ten effective management development practices. The three most frequently selected

practices were clarification of goals and performance expectations (86%), ongoing

performance measurement, feedback and coaching (78%), and mentoring by senior

managers (72%). The three practices perceived to be least effective were purposeful

41

cross-training experiences (58%) visiting other departmental/organisational facilities

(54%) and 360 feedback systems (51%). Likewise, Louma (2005) assessed the

developmental requirements of middle managers in Finnish Industries

(manufacturing services, bank and insurance, retail, and others). Of the management

development practices presented, the preferred dimensions were ranked in the

following order: self-initiated studies (68.9%), in-company courses (66.8 %), internal

development projects (49.7 %), external courses (48.0%), and performance reviews

(39.7%).

O’Connor et al. (2006) evaluated senior and junior managers’ preferences for various

management development dimensions and reported different outcomes for each

group. For senior managers, the order of preferences was management development

programmes, conferences, and seminars, whilst for the latter group, the order was

personal skill training, conferences, and management development programmes.

Overall, both groups selected the same dimensions but with varying levels of

emphasis, suggesting that the development and learning needs of an executive are

most likely to differ significantly across managerial levels.

At a glance, the diverse results in the above studies present a challenge in validating

whether the trend observed in Vicere et al.’s studies has changed in a significant

manner. However, based on a cross-sectional review, the analysis reveals that

managers are becoming more interested in unstructured and informal development

dimensions such as self-directed learning, conferences, seminars, and coaching.

According to Brown (2006), senior managers in the UK have developed a strong

preference for informal mechanisms of development such as networking with peers,

group problem solving, presentations/lectures and coaching, ranked in descending

order. This observation reinforces the initial notion that informal and action-based

approaches to executive development are becoming far more popular than formal

dimensions or mechanisms with senior managers.

Executive Development Associates, a US-based consultancy firm, conducted a

survey in 2006 on the trends in executive development, and collated information

from 100 chief learning officers and heads of leadership development from top

companies around the world. The survey elicited the views of respondents on the

42

most relevant learning methods over the next three years. These results mirrored the

initial observations made by Brown (2006), listed in order of importance: use of

company executive expertise, action learning, use of external consultants, external

executive coaching, use of internal executive development experts, case studies,

online learning, computerised business simulations, internal coaching, and finally

benchmarking other organisations.

Here, we find that three learning methods dominated the survey: use of senior

executive expertise, action learning, and executive coaching, as observed by Brown

(2006). Brown’s study excludes networking, but this may be a very important facet

of executive development, discussed previously in the literature review. Executive

coaching as a development mechanism is not fading off the radar, but rather features

prominently as a development mechanism selected by senior managers in the US.

A CIPD study conducted in 2007 on executive development delivery dimensions

highlights some of the current approaches to developing senior managerial

competencies. The findings of the study reflect the utilisation of both “hard” and

“soft” dimensions namely, coaching and mentoring, secondments, reading up on and

attending professional and industry-related conferences. Some other methods

articulated in the study, worth highlighting, are discussed as follows:

Learning Groups: This usually involves arranging of groups of senior managers to

meet together to work on their learning needs. This approach is similar to group

mentoring. Such groups typically consist of five or six managers who create their

own learning agenda with the help of a skilled group adviser to make the system

work.

One variant of this model is the action learning set where individuals might take on

projects either individually or as a team so long as the projects are realistic and the

managers focus on the “learning” and not the “action” (Ingram, 2002; Loo, 2003).

Zuber-Skerritt (2002) posits that action learning recognises the possibility for

learners to generate knowledge rather than merely absorbing passively the results

produced by others.

According to Zenger and Folkman (2003), the most effective action learning

methods tend to focus on changing behaviours and are practically orientated in order

43

to generate concrete results and build accountability for implementation. Huspith and

Ingram (2002) view action learning as an approach in which learners work together

in sets and try to solve organisational problems using good practice to inform

solutions, fostering both individual and organisational learning. Loo (2003) contends

that, ultimately, action learning should stimulate personal growth following

reflections on multidisciplinary group reviews of solutions to a problem. However,

the personal growth acquired through action learning should then transcend into

some level of organisational growth, but this process is often not clear-cut. Winch

and Ingram (2002) posit that action learning foments learning at different levels,

depths, from new networks, through new relationships, providing senior managers

faced with business issues the opportunity to achieve personal transformation

through self-reflection.

Shadowing and Mentoring: Shadowing involves the pairing up of two senior

managers with one spending the day following his colleague around which is

concluded with a de-briefing from the “shadower”. Both parties can learn from the

process, and role reversal occurs subsequently, if deemed necessary. This is a highly

cost-effective learning mode but requires careful organising to produce the most

effective outcomes. This approach is advocated as an appropriate learning method

for developing tacit knowledge and in particular, skills such as presentation,

teamwork, and ethical behaviour (Mcloughlin, 2004).

Mentoring, on the other hand, is a committed, long-term relationship in which, a

more seasoned professional supports the development of a junior professional

(Hernez-Broom and Hughes, 2004). Mentoring programmes can be highly structured

or open learner-led relationships (Marcus, 2004). Executive mentoring will

invariably reflect the learner-led approach given that such managers by virtue of

seniority will demonstrate high levels of self-efficacy.

E-learning: As senior managers may not admit weaknesses in front of others, the

anonymity of the internet or a company intranet can allow them to explore issues

independently without directly involving others. However, many senior managers

may need guidance to avoid wasting time on irrelevant websites.

44

The internet and multimedia technologies are reshaping the way knowledge is

delivered, allowing e-learning to emerge as a solution to lifelong learning and

training delivery (Zhang et al., 2004). E-learning content differs from other

educational materials, in the sense that it can be disassembled as individual learning

objects and tagged and stored for reuse in a variety of different learning contexts

(Harris, 2005).

Research has shown that properly managed e-learning provides measurable benefits

to organisations (Whitney, 2004; Chelan, 2006; Jamieson, 2005). The self-delivery

environment of e-learning systems provides the opportunity for senior managers to

develop their competencies at their own pace and need not depend on instructors in a

traditional training environment.

Executive Coaching: Zeus and Skiffington (2000) suggest that executive coaching

is a personalised form of assistance for learning, involving building individuals’

strengths and recognising and overcoming weaknesses. Unlike other methods of

development dimension, coaching is not instructional in nature but concerned with

assisting and facilitating professionals enhance and maximise their performance (Du

Toit, 2007). Furthermore, Stern (2004) argues that a common set of characteristics of

coaching that successfully address the specific needs of management exists. These

needs include an efficient and practical results-oriented approach, precisely the

coaching skills that will help managers make sense of their organisational

environments.

The growing importance of coaching as a development tool for executives reflects its

ability to address several of the unique issues experienced by individuals in these

positions. Coaching is conducted almost entirely in real business time and focuses on

specific, real-life contextual issues. Jones et al. (2007) argue that the common

problem of transferring training to the work environment is minimised and the

application of training is maximised when coaching is used. In addition, the coaching

process is personalised, contrary to a “one-size-fits-all” approach used in many other

areas of executive development.

Moreover, executive coaching does not require the executive to be absent from the

workplace for a substantial period and is linked to generating positive organisational

45

outcomes. For instance, Thach (2002) examined the impact of executive coaching on

the leadership effectiveness on 186 executive managers in a six-month period, during

which the perceived leadership effectiveness of the executives who underwent

coaching increased by 60%. Peterson and Miller (2005) suggest that coaching can

positively influence middle and executive managerial performance, leading to a

positive return on investment.

Two major variants of coaching are delineated within the literature (Olivero et al.,

1997; Thach and Heinselman, 2000): performance-based and in-depth coaching. The

latter tends to use a rather psychoanalytical approach, attempting to reveal deep-

seated issues and often exploring personal values and motivations, whilst the former

focuses on practical and specific business issues such as goal setting, project

management, or a specific interpersonal skill issue, which is hindering the executive

in achieving high-quality business performance.

Performance-based coaching is generally short-term in nature, requiring one to

several meetings between coach and client. The second category of coaching is not

considered very effective for executive coaching, owing to time restrictions and the

fast-result orientation of business (Judge and Cowell, 1997). Regardless of the type

of coaching employed, both methodologies are targeted at enabling executives

achieve goals to enhance organisational productivity and personal job satisfaction.

A cross-section of the executive development dimensions captured by researchers is

presented in Table 2.1. A number of observations emerge as follows: most of the

studies are based on single-country data apart from Gray and Mabey’s (2005) study

that employs an expansive and multi-national perspective.

Also, whilst job rotation, special projects and coaching feature quite prominently, it

is unclear if this is mainly attributable to higher than proportionate impact of such

dimensions on organisational outcome or simply due to perceived importance

attached to them by researchers. A significant number of studies combine both

formal and informal dimensions of L&D, but most researchers fail to provide a clear

framework for analysing the various measures; moreover, the typical approach

prominent in the literature is that involving a generic list of measures.

It is worth noting that these measures fail to account for L&D derived from the

networking which occur both within and outside organisations, but the social capital

46

concept suggests that networking is a crucial platform for learning and development

among executives (Anderson, 2007; Rodan and Galunic, 2004).

Table 2.1: Management and Executive Development Dimensions.

Author (s) Management and

Executive

Development

Dimensions

Research Overview Country Journal

Vicere

(1994)

Job rotation, in-house

training, special

projects, the-job

training,

coaching/mentoring,

performance feedback,

and teaching/consulting

employees

Reports on a ten-year

study of global

trends in the field of

executive

development and

shows how the

emphasis has

evolved to keep pace

with organisational

dynamics

US Journal of

Management

Development

Vicere

(1997)

Special projects, job

rotation, on-the-job

training, in-house

training,

coaching/mentoring,

performance feedback,

external educational

programmes,

and teaching/consulting

employees

Fourth in a series of

investigative efforts

that endeavoured to

track trends in

executive education

and leadership

development on a

longitudinal

approach

USA Journal of

Management

Development

47

Author (s) Management and

Executive

Development

Dimensions

Research Overview Country Journal

Garavan

(1999)

In-house development

programmes, external

development

programmes, training

centres, performance

review, career

development,

job rotation,

secondments,

international

assignments,

consultants’

mentoring, counselling,

coaching, organisational

role analysis, task

force/project groups,

seminars/workshops,

group training

programmes,

action learning, self-

development group,

learning contracts, peer

relationships,

outdoor management,

and development

programmes

Discusses the debate

within the field of

management

development,

considering a wide

range of definitional

issues, alternatives,

and complementary

management

development

strategies

Ireland Journal of

European

Industrial

Training

48

Author (s) Management and

Executive

Development

Dimensions

Research Overview Country Journal

Longnecker

and Fink

(2001)

Clarification of roles,

goals and performance

expectations, ongoing

performance,

measurement and

feedback, mentoring,

formal career planning,

challenging job

assignments, purposeful

cross-training

experiences, formal

performance appraisal

and review, visiting

other facilities and

departments, increased

contact with

external/internal

customer, special

assignments (e.g.

problem-solving teams,

task forces etc.), and

360 degrees feedback

systems.

Examines the

specific management

development

practices considered

most important from

a manager’s

perspective to

improving their

performance in

rapidly changing

organisations.

USA Journal of

Management

Development

49

Author (s) Management and

Executive

Development

Dimensions

Research Overview Country Journal

Longnecker

and Nuebert

(2003)

Clarifying roles, goals

and performance

expectations, ongoing

performance

measurement, feedback

and coaching,

mentoring, performance

appraisal and review,

challenging/difficult job

assignments, formal

career planning

discussions, increased

contact with

external/internal

customers, cross-

training experiences,

visiting other

departments/organisatio

ns/facilities, and 360-

degree feedback

systems

Identification of

what frontline

managers considered

the most important

factors/practices for

improving their

performance in the

context of rapidly

changing

organisations

USA Career

Development

International

50

Author (s) Management and

Executive

Development

Dimensions

Research Overview Country Journal

Louma

(2005)

Self-initiated studies, in-

company courses,

external courses,

internal development

projects, and

performance reviews

Examines the

perspective of

individual managers

on how the various

forms of

management

development relate

to managers’

strategic awareness

and perceived value

of management

development

Finland Journal of

Management

Development

O’Connor,

Mangan and

Cullen

(2006)

Personal skills training,

conferences/seminars,

and management

development

programmes

Examines numerous

interrelated issues

including the

alignment of

management

development needs

to business strategy,

the use of

management

development

methods, the

development of high

potential managers,

and the assignment

of responsibility for

management

development

activities

Ireland Journal of

Management

Development

51

Author (s) Management and

Executive

Development

Dimensions

Research Overview Country Journal

Mabey

(2004)

Internal skills

programmes, external

courses, seminars, or

conferences, mentoring

or coaching, formal

qualifications, in-

company job rotation,

external assignments,

placements, or

secondments, and e-

learning

Policies, practices,

and impact of

management

development in

Europe

Denmark,

France,

Germany,

Norway,

and Spain

Advances in

Developing

Human

Resources

Gray and

Mabey

(2005)

Internal programmes,

external courses,

mentoring,

qualifications, rotation,

e-learning, and external

placements

Examines the main

contrasts in

management

development

practices between

large and small firms

to identify key

differences in

strategic approaches

to management

development

Britain,

Denmark,

Norway,

France,

Germany,

Spain and

Romania

International

Small

Business

Journal

52

Author (s) Management and

Executive

Development

Dimensions

Research Overview Country Journal

Sutaari and

Vitala

(2008)

Management training

and education

programmes, self-help

activities, special job

assignments (e.g.

projects) regular

performance evaluation,

job rotation, internet-

based learning, personal

career planning, and

international assignment

Evaluates the

preferences for

management

development

methods used in the

development of

senior managers, and

to discover the

perceived

effectiveness, as well

as strengths and

weaknesses, of

different methods

Finland Personnel

Review

In addition, some authors (USA: Vicere, 1994; Vicere, 1997; Longnecker and

Nuebert, 2003; Finland: Louma, 2005; Sutaari and Vitala, 2008; Ireland: O’Connor,

Mangan and Cullen, 2006) focus on specific geographic regions, whilst others

(Denmark, France, Germany, Norway and Spain: Mabey, 2004; Britain, Denmark,

Norway, France, Germany, Spain and Romania: Gray and Mabey, 2005) advance a

multinational approach in order to extend the generalisation of the findings.

It can be observed in Table 2.1 that some wide-ranging dimensions have been

captured by scholars: formal (management training and education programme)

versus informal (job rotation, special job assignments), internal (internal

programmes) versus external delivery (external courses, seminars, or conferences),

and self-initiated (self-help activities, internet-based learning, personal career

planning) versus firm-initiated (in-company job rotation). Some scholars have

replicated a number of dimensions across studies, with no obvious rationale behind

this replication. For instance, Gray and Mabey (2005) and O’Connor, Mangan and

Cullen (2006) replicated personal skills training, conferences/seminars, management

53

development programmes. Most of the above dimensions fail to address strategic

L&D; however, Louma (2005) attempts to examine the perspective of individual

managers of how the various forms of management development relate to the

managers’ strategic awareness and perceived value of management development.

Overall, the above points reflect the growing importance of a broad conceptualisation

of executive L&D, given that most scholars account for both formal and informal

dimensions.

2.4 Informal Learning and Executive Development

Informal learning is perceived to be an effective mechanism for developing

managerial competencies (Winch and Ingram, 2002; Loo, 2002; Yorks et al., 2000).

Compared to learning occurring in formal environments, informal learning occurs in

parallel with work activities, thereby presenting managers with increased

opportunities to quickly assimilate and integrate new knowledge, leading to the

generation of positive organisational outcomes (Garavan et al., 2002; Hager,

2004a).

Consequently, informal learning may offer managers the practical benefit of

identifying, generating, modifying, and integrating learning in the workplace and

the resulting knowledge transformation can generate positive effects on

organisational outcomes, exemplified by the development of new products and

services (Pawlowsky, 2003; Curado, 2006). The dynamic diffusion and

transformation of knowledge that occurs in the informal workplace environment

may not be prevalent in other learning environments.

According to Malcom et al. (2003), informal learning offers synergy between

practice and theory to stimulate effective learning, which may not exist in formal

environments. Consequently, in formal learning environments, there may be

potential time lapses between when managers actually acquire, absorb, and apply

knowledge, potentially influencing the rate of competency development (Marsick,

2009). It is therefore reasonable to posit that the cycle time for generation,

modification, and integration of new knowledge in the workplace and the resulting

54

transformation of such knowledge into novel products and services is likely to be

relatively shorter under informal conditions than formal learning environments.

Furthermore, Colley et al. (2002) posit that the definition of informal learning tends

be derived from its dissimilarity with the formal modes of learning. Marsick and

Watkins (2001) define formal learning as learning that typically takes place in

formal educational settings, is structured in nature, and occurs off the job and

outside the work environment.

This foregoing definition is narrow given that some forms of structured learning

could be situated within the work environment such as training delivered in the

workplace by internal and external instructors. Furthermore, the differentiation of

informal modes of learning from formal modes indicates that the latter is

characterised by a prescribed framework and organised learning events, leading to

the award of qualifications (Eraut, 2000). Here, the view of formal learning is more

expansive, referring to dimensions that occur both within the academic and work

environments. The lack of certification in informal training in the workplace does

not imply that such dimensions are neither well structured nor delivered effectively.

As highlighted above, literature on informal learning is characterised by varying

definitions; therefore, the conceptualisation of the term lies within a wide spectrum,

ranging from a narrow to wide context.

Some commentators such as Dale and Bell (1999), taking a narrow focus, defined

informal learning as learning that takes place in the work context, and relates to an

individual’s performance of the job or employability. In fact, the above definition

reflects workplace learning, as a subset of informal learning.

In contrast, Marsick and Watkins (2001) offer a broad definition, positing that

informal learning takes place in any setting where people have a need, motivation,

and opportunity for learning and is usually intentional but not highly structured and

includes self-directed learning, networking, coaching, mentoring, and performance

planning. Comparatively, this is a rather encompassing definition of informal

learning and hence adopted in this study.

In an attempt to provide some structure around the various definitions cited by

commentators, Hager (2004a) proposed that informal learning should be

conceptualised according to four broad organising principles:

55

Context: learning that occurs outside of classroom based formal educational

settings

Cognisance: intentional/incidental learning

Experiential: practice and judgement

Relationship: learning in teams and in close proximity to others

Although these four organising principles may have a high degree of applicability to

the workplace learning context, in reality, they are significantly interrelated with

L&D in general. For instance, in a broad sense, formal learning includes some

relational dimensions, as participants have the opportunity to develop relationships

through working in teams, joint assignments, etc.

However, it can be argued that compared to the continuous relationship usually

possible in informal learning settings, in formal learning settings, relational

interactions are usually limited owing to time constraints. Equally, the principle of

cognisance is applicable to both formal and informal settings as some unintentional

and incidental learning can emerge through formal learning. Consequently, the only

clearly unique features of informal learning are its principles related to context and

experiential dimensions.

Garavan et al. (2002) define workplace learning as a set of processes that occur

within specific organisational contexts and involve the acquisition and assimilation

of an integrated cluster of knowledge, skills, values, and feelings that can result in

the fundamental change of individual and team behaviour.

Workplace learning, according to Senker and Hyman (2004), involves the collective

efforts that employees undertake to acquire and share knowledge. The above

interpretations suggest that all layers of employees within an organisation are

exposed to some form of workplace learning, and executives are not excluded from

the process.

According to Dyer and Hatch (2004), firms gain a competitive advantage by

transcending the learning curve more quickly than rivals, implying firms outperform

rivals through effective deployment of L&D processes, and as a result, gain

56

sustainable long-term competitive advantage. The competitive advantage gained

through learning encompasses all forms of learning and transcends all levels within

organisations, including executives. As such, executive L&D should include both

formal and informal activities – the latter, however, may be potentially difficult to

measure. As a significant proportion of executive L&D stems from informal and

workplace activities, it should constitute the largest segment of measures against

which executive development and organisation performance effects are assessed.

Executives can also derive informal learning and development from social-

networking activities. Such social network interactions are assumed to enhance or

constrain access to valued resources and development (Seilbert et al., 2001).

Networking leads to increased exposure to people inside and outside a firm, and this

can enhance learning, development, and understanding of organisational practices,

etc. (Lankau and Scandura, 2002).

In addition, networking provides the platform for building and nurturing personal

and professional relationships, embodying a system of information, contact, and

support (Whiting and De Janasz, 2004). Internal and external social networks formed

by executives are characterised by parameters such as network size and strength of

network ties that drive the creation of social capital, which can be harnessed to

facilitate individual and organisational performance (Adler and Kwon, 2002). A vast

amount of studies on networking benefits have focused on examining how this form

of social capital translates into a variety of benefits for managers, such as quick

promotions and high levels of compensation (Forret and Dougherty, 2004; Marlow

and Carter, 2004; Maxwell and Ogden, 2006; Marken, 2001; Singh and Vinnicombe,

2001).

Some authors (Anderson, 2007; Rodan and Galunic, 2004), however, report an

exception to this trend, by examining the underlying mechanisms through which

executives learn and develop competencies through networking activities. Exploring

the dynamics of the information-gathering behaviour of managers, Anderson (2007)

posits that networking characteristics affect information benefits, but these effects are

stronger for managers motivated to maximise such opportunities. Moreover, findings

of studies focusing on information intensity, network size, tie strength, and need for

cognition behaviour of managers suggest that continuously eliminating redundant

57

network links and replenishing them with increased diversity help managers

maximise the benefits of social capital (Adler and Kwon, 2002).

Similarly, Rodan and Galunic (2004) examine the relationship between knowledge

heterogeneity in social capital and its effects on a manager’s overall performance and

innovativeness. The authors refer to heterogeneity as the variety of knowledge and

expertise to which a manager has access through a network. Results emerging from

the study indicate that managers who move away from narrow network structures are

most likely to benefit from political manoeuvrability and can stimulate higher

organisational performance. In addition, the authors argue that although access to

diverse knowledge and network can generate comparable impact on overall

performance, it is also important for developing service and product innovation.

Although these studies provide further insight into the effects of managerial

networking, they do not categorise the nature and type of information transferred

across the social network of managers and how such information influence L&D in

general. As previously mentioned, L&D competencies gained through social

interactions (within and outside the organisational settings) can enhance or contribute

towards the effective development of firm strategy, but this notion requires empirical

verification.

Recent academic literature on workplace learning challenges the notion that learning

is purely a function of knowledge and skill acquisition. This view is advanced by

Colley (2012), who draws on the socio-cultural theory to advance a more holistic

view of learning as a process rather than a product. The process view of learning is

also perceived to depend on social participation, encompassing issues of identity and

belonging (Lave and Wenger, 1991; Hughes et al., 2007). Another important aspect

of workplace learning according to Colley et al. (2003) is the concept of “vocational

habitus” that highlights the significance of “fitting in” in a community of practice.

Under this concept, individuals who fall outside an extant community of practice are

excluded from the “vocational habitus”. This concept offers supporting evidence to

the “isolation” often experienced by executives when engaging in training and

development dimensions, which do not reflect their level of seniority.

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Conclusion

To recap, the above section has considered the various dimensions of executive and

management development advanced by various researchers, highlighting the shifting

emphasis from formal to informal dimensions. A detailed review of how informal

learning influences the process of executive L&D was also discussed in detail. In

addition, it has been established that social settings and networks can provide

executives with significant information that can directly or indirectly affect a firms’

overall strategy formulation and implementation process (Winch and Ingram, 2002;

Loo, 2002; Yorks et al., 2000; Anderson, 2007; Rodan and Galunic, 2004).

2.5 Models of Management and Executive Development

Researchers have attempted to present different models to facilitate the effective

deployment of management development. In one notable model attributable to

Burgoyne (1988), management development is classified into six maturity levels,

where level 1 reflects situations where no systematic management development is

deployed, level 2 accounts for isolated and tactical management development, level 3

depicts a situation where management development is integrated and structured at the

tactical level, level 4 reflects management development incorporated into corporate

policy, level 5 reflects situations where management development strategy fuels

corporate policy; finally, level 6 reflects where management development fuels both

corporate policy and strategic development processes.

According to Burgoyne’s Model, the highest level requires full alignment of

management development dimensions with corporate policies to generate an optimal

impact. In essence, the model posits that maximum benefits can accrue from

management development dimensions if they are inextricably linked with corporate

policies and goals. In other words, the sporadic implementation of management

development dimensions is likely to dilute the organisational impact of management

development. In reality, this can be implemented effectively by articulating credible

corporate vision and goals before formulating appropriate management development

policies, programmes, and activities.

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Mumford (1993) presented a different model which is process-oriented and

categorises management development dimensions as follows: type 1 captures

informal management development and is mainly incidental in occurrence, type 2

reflects integrated dimensions with an opportunistic focus, and type 3 embodies

formal management development, which is well planned and coordinated.

Whilst both authors offer some overlapping propositions on management and

executive development dimensions, two main critiques can be raised against

Munford’s model. Firstly, it oversimplifies the entire management development

process, which, in reality, may be rather complicated. Secondly, Mumford explicitly

fails to link management development dimensions to the achievement of

organisational strategic goals. Some implications can arise from the latter argument.

For instance, if organisations apply the Mumford model in isolation of the other

considerations presented by Burgoyne, they may be inclined to develop a tactical

response to management and executive development rather than advancing

dimensions linked to overall corporate strategy. This could possibly explain some of

the rather sporadic returns attributed to management development dimensions

deployed with no explicit alignment to strategic intents of organisations.

In an attempt to address the observed deficiencies in early models, Louma (2005)

combined the two models developed by Burgoyne (1998) and Mumford (1993) to

generate a new management development model. As a result, a three-staged model,

reflecting progression towards high-level integration between strategic management

and management development was formulated. Outlined below are the details related

to each level:

Sporadic management development: Management development at this level is

considered uncoordinated; the target setting is vague and organisational ownership of

management development initiatives is weak. The content of management

development is loosely coupled with specific development needs or future

aspirations with learning benefiting individuals rather than the organisation.

Reactive management development: In this case, management development is used

as a response to identified problems or anticipated failures in performance.

Management development follows technological, financial, or product/market-

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related considerations of strategy. There are some consistencies in various

management development initiatives, which represent mainly formal learning and

management development designed to benefit the organisation rather than

individuals.

Integrative management development: Here, various management development

initiatives, formal and informal, form an integrated solution, focusing on the key

elements of current strategy, addressing previously unidentified solutions or

problems, possibly leading to the generation of novel strategies. Management

development’s input to business strategy is sought intentionally to benefit both

individuals and the organisation.

Figure 2.2: Louma’s Model of Management Development.

Arguably, maximum benefits may be accrued from an integrated format than the

sporadic configuration, which is unaligned with corporate strategy. In addition,

promoting the benefits of the integrative perspective, particularly the strategic impact

of such an approach may be more appealing to executives than sporadic approaches

of learning and development. Furthermore, executives may perceive the sporadic

deployment of L&D as irrelevant and may lack the motivation and commitment to

engage in such activities.

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In spite of the positive attributions associated with Louma’s model of management

development, it lacks the level of details for practical application, as it does not

clearly specify the appropriate components of formal and informal development.

However, the model offers the basis for developing a wide measure of executive

L&D.

2.6 Theoretical Conception of an Integrated Executive L&D

Measure

In an attempt to address the abovementioned limitations, Louma’s high-level

conceptualisation of management development will be augmented by some concepts

from the literature to present a practicable model, reflective of the executive work

scope. Although learning has multiple facets and dimensions, these can be structured

meaningfully to reflect the range of learning that executives experience. It is

important to highlight that the following conceptualisation of L&D can involve either

individual dimensions or a complex interaction between two or more dimensions at

any particular time.

Structured learning or didactic, which is usually associated with the formality and

educational pedagogical frameworks (Beckett and Hager, 2002; Hager, 2004a,

2004b) is considered an important element of executive L&D. Such learning

encompasses learning deployed via direct interaction and may be delivered in

academic settings or in-house, by external/internal training providers. In this

particular instance, the emphasis will be on in-house and externally delivered

courses. Didactic modes of learning are not without criticism. Notably, Lave and

Wenger (1991) argue that learning comprises processes of participation in a

community of practice, i.e. family, work teams, professional associations, etc., which

is underpinned by the social theories of learning and supported by others (see inter

alia, Engestrom, 2001, 2004; Wenger, 1998). Lave and Wenger established this

perspective based on a case study of five organisations, illustrating that through a

relational structure, a new member could progress to stability and, eventually, attain

full mastery or expert status in a specific profession. In relation to executive L&D,

the community of practice or participative perspective is akin to learning originating

from interacting with peers, engaging in professional association programmes and

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similar activities. Such activities are the main elements of the participative dimension

of the executive L&D espoused in this research.

Self-directed learning may be didactic or unstructured in nature and may be

delivered through internal or external providers, but the individual learner has control

over the pace of delivery and learning outcomes (Louma, 2005; O’Connor et al.,

2006). Given the characteristic of isolation associated with the executive cohort

previously highlighted, another dimension of L&D that may be suitable to the

executive cohort is self-directed learning, which according to Sutaari and Vitala

(2008), embodies individual-initiated learning without any form of external

dimension, featuring highly developed information seeking and retrieval and critical-

thinking skills (Luoma, 2005). Such directed learning at the workplace is expected to

be influenced by individual characteristics of the learners (Tracey et al. 2001;

Machin and Fogarty, 2004).

Participative learning is based on the “expansive learning” concept postulated by

Engrestrom (2001, 2004), drawing on the social and interactive perspectives,

addressing learning, knowledge creation, and expertise to be dynamically constructed

through multiple and interacting communities of practice. Engrestrom based this

model on activity theory, stressing on a transformational outcome to learning which

occurs when individuals question and challenge existing norms within the activity

system. In addition, individuals are motivated to reconceptualise their ideas into a

broad horizon because of engaging in this form of learning.

According to Engrestrom, expansive learning is not limited to pre-defined contexts

and tasks and can encompass a wide context. Specifically, the application of

expansive learning to an executive will encompass L&D dimensions occurring in

both internal and external networking and at the individual and team levels.

Networking-related learning fits into the expansive learning framework as it

involves social interactions, which occur within various inter-functional settings or

outside the barriers of organisations, encompassing various external events and

interactions such as professional associations, industry events, conferences, etc.

Thus, the concept of expansive learning encompasses both network-related and

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participative learning dimensions, with the latter focusing mainly on intra-

organisational considerations.

Experiential learning is considered an important facet of executive L&D, but its

definition is surrounded by conceptual ambiguity (Malinen, 2000). By taking into

account the needs of executives and the fact that adult learning is a transformational

process, resulting in expanding human possibilities and action (Davis and Sumara,

2000), experiential learning encompasses the expansion that shifts the logic of expert

knowledge, claims universal conceptual validity, and resists knowledge authorised

solely by scientific evidence (Fenwick, 2003).

Consequently, such learning encompasses a cluster of activities, namely risk taking,

experimenting, and job challenges. Clarke (2005) and Chiva et al. (2007) have

included these processes in the validation of the measure associated with informal

learning without explicitly labelling these as experiential learning, as defined above

and applied to this study.

According to McAdam and Leonard (1998), strategic practice is characterised by

strategic thinking, activities, and behaviours that enhance managerial readiness to

exploit dynamic opportunities and facilitate learning. Furthermore, Thompson and

Cole (1997) highlight the importance of a range of strategic competencies and

learning behaviours vital for competitive success, namely strategic awareness and

control, strategic implementation, competitive strategy, ethics and social

responsibility, stakeholder satisfaction, crisis avoidance, quality and customer care,

and functional competencies.

Strategic learning, as applied to this study, reflects a range of behaviours and

dimensions capable of enhancing executive ability to exploit dynamic opportunities

in the business environment (internally and externally), taking into account ethical

and wide stakeholder issues, to drive superior organisational performance.

In conclusion, the L&D dimensions discussed above, in totality, reflect a broad

representation of formal and informal executive learning L&D, drawing on a review

of the SHRM, management development, and strategic management literature.

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Such a broad conceptualisation of executive L&D supports the notion of

ambidextrous learning (Benner and Tushman, 2003; Lubatkin et al., 2006; Li and

Lin, 2008), which has shown empirical evidence of positive organisational

performance effects (Prieto et al., 2009; Uotila et al., 2009; Bodwell and Chermack,

2010; Luzon, and Pasola, 2011; Lee and Huang, 2012). In addition, ambidextrous

learning is advanced as an integration of exploratory and exploitative approaches of

learning (Dass and Parker, 1999; Cao, et al., 2009; Lee and Huang, 2012).

Exploratory learning is generated through conscious transformation of current

internal processes, routines, and knowledge and encompasses exploring new

information or knowledge for organisational benefits (Miner et al., 2001; McGrath,

2001; Wang, and Rafiq, 2009). Conversely, exploitative learning employs knowledge

embedded in an organisation’s pre-existing knowledge base to generate solutions to

problems (Martin and Mitchell, 1998; Schildt et al., 2005; Uotila, 2009).

The link between ambidextrous learning and the broad executive L&D measure

under consideration is premised on the view that participative learning involves

learning derived from engaging in internal activities and processes. Participative

learning embodies some of the characteristics and semblance of exploitative learning

given that the knowledge generated from this form of learning is based on

interactions that occur within an organisation. On the other hand, strategic and

network-related learning may arise from engaging with external parties and is highly

likely to relate to exploitative learning. Thus, there is reasonable evidence of both

exploitative and explorative learning in the broad conceptualisation of executive

L&D, thus reflecting the characteristics of ambidextrous learning (Lubatkin et al.,

2006; Li and Lin, 2008).

Summary

The literature currently emphasises on holistic, systemic, and integrated perspectives

of management development (Louma, 2005; Weiss and Molinaro, 2006). Such views

advocate policies, approaches, and practices that locate management development

within the wide technical, social, political, and cultural contexts and acknowledge the

role of both individual and organisational factors within the management

development process. Another prevailing view is that management development

objectives and activities must be firmly grounded in organisational strategy and

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structure and must align with changes at the organisational and individual executive

development levels (Boshyk, 2002; Brown, 2006; Loo, 2006). The management

development process must therefore be pragmatic, embedded, and practised within

what managers consider as their unique organisational context and reality.

There is evidence that the focus of management development has shifted to activities

such as coaching, action learning, natural learning, self-development processes,

mentoring, and other peer-related learning activities (Longnecker and Fink, 2001;

Mabey, 2004; Sutaari and Vitala, 2008). The concept itself has broadened to

emphasise on the development of the whole person, rather than the acquisition of

competencies for a particular role (O'Conner, 2006; Weiss and Molinaro, 2006).

Therefore, it can be said that integrative approaches of executive L&D rather than

individual-focused approaches should be implemented by organisations.

It has also been observed that executives may be attracted to L&D programmes that

are linked to organisational strategy. This dimension may generally reflect the nature

of work undertaken by executives and therefore convey the perception that it

contributes to organisational outcomes better than other forms of learning and

development (Brown, 2006).

To recap, based on the review of the models and dimensions of executive and

management development, the theoretical conceptualisation of an integrated measure

of executive L&D, encapsulating six dimensions (strategic, experiential,

participative, self-directed, networking-related and participative) is derived.

2.7 Theoretical Justification Underpinning the Expected Effects of

Executive L&D on Organisational Performance

The theorisation that executive L&D will affect organisational performance, drawing

on a number of interrelated theoretical concepts – Resource-Based View (Barney,

1991; Barney, 2001; Clulow et al., 2007), Dynamic Capabilities (Chien and Tsai,

2012; Eisenhardt and Martin, 2000; Zott, 2003), Human Capital (Rastogi, 2002;

Ulrich, 1997; Wright et al. 2001) and Resource Dependency (Pfeffer, 1972; Pfeffer

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and Salancik, 1978; Hitt and Tyler, 1991; Hillman, 2005) – is discussed in detail as

follows:

2.7.1 Human Capital Theory

Scholars have attributed multiple definitions to the concept of human capital

(Kulvisaechana, 2006), but the extant definition considers it a repertoire of

knowledge, competency, attitude, and behaviour embedded in an organisation’s

human resource (Youndt et al., 2004; Rastogi, 2002). It is also contended that the

Human Capital theory has migrated into several research strands such as corporate

value creation (Rastogi, 2002; Mayo, 2001), competitive advantage (Gratton, 2000)

and long-term organisational growth (Tomer, 2003; Chuang, 1999).

The growing emphasis on human capital perhaps reflects the perception that, market

values of organisations depend far less on tangible and more on intangible resources,

embedded within human resources. There is an emerging view that well-developed

human resources provide the foundation on which human capital can be developed

and eventually utilised for the benefits of the organisation (Rastogi, 2000).

Consequently, organisations are motivated to continuously invest in human capital

development activities across all levels (i.e. executive, managerial, and staff) with the

expectation of deriving superior corporate success and increased efficiencies (Youndt

et al., 2004).

It is also noted that whilst human capital can be generated through several avenues,

comprehensive training activities focusing on the depth of dimensions, duration of

programmes, and breadth of offerings have been cited as some of the most reliable

mechanisms for enhancing human capital capacity (Huselid, 1995; Snell et al., 2000).

It implies that training and development dimensions directly affect organisational

capital and can generate additional benefits such as social capital, with far-reaching

effects beyond the boundaries of the firm (Youndt, 2004). Social capital, which is a

subset of human capital, embodies the knowledge in groups and networks (Nahapiet

and Ghoshal, 1998). Specifically, social capital encapsulates knowledge resources

embedded within, available through, and derived from a network of relationships

(Burt, 1992).

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Development programmes not only increase employees’ personal knowledge and

human capital but also foster an environment where employees can build

relationships with peers and transfer and share knowledge among themselves,

thereby increasing their social capital capacity (Wallis et al., 2004). Likewise, as

individuals learn and increase their human capital, they may be creating knowledge

that can potentially form the foundation for organisational learning and knowledge

accumulation (i.e. organisational capital). Such organisational capital represents

institutionalised knowledge and codified experience that may be stored in databases,

routines, patents, manuals, structures (Hall, 1992), and some refer to this latter

knowledge as structural capital (Bontis, 1996) which can be leveraged for

competitive advantage.

Theoretical Relationship between Human Capital Theory and Organisational

Performance Effects

Theoretically, the link between the human capital and organisational performance

can be explained as follows. As organisations invest in L&D activities such as

executive L&D, human capital will be generated (Rastogi, 2002; Mayo, 2001). The

human capital generated through executive L&D can eventually generate competitive

advantage (Gratton, 2000), leading to positive organisational performance (Tomer,

2003; Chuang, 1999).

The effects of human capital on organisational performance may be explained

through the Social Capital (Nahapiet and Ghoshal, 1998) and Job Demand Resource

theories (Demerouti, et al., 2001a: Demerouti, et al., 2001b) as follows:

According to Social Capital theory, networks of relationships generate valuable

resources and provide members with “collectively owned capital” which can be

exploited for organisational benefits (Nahapiet and Ghoshal, 1998). Adler and Kwon

(2002) posit that the presence of high-level social capital is likely to enhance team-

learning behaviours. Thus, as executives engage in L&D (situated within their

internal and external network), they gain greater access to new resources in terms of

information and guidance related to effective performance (Sparrowe et al., 2001).

Executives can then deploy the social capital to offer increased support and resources

to subordinates (Edmondson, 1999; Van Der Vegt and Bunderson, 2005; Van

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Emmerik et al., 2011). As employees benefit from the support and resources from

executives, they can in turn generate creative solutions and products (Shore and

Coyle-Shapiro, 2003; Wang et al., 2005; Yukl et al., 2009) which can result in

increased customer satisfaction (Babbar and Koufteros, 2008; Maddern et al., 2007)

and eventually translate into enhanced organisational performance effects.

Empirically, several researchers have reported positive effects between training and

development (which is considered to be a source of human capital) and

organisational performance (Bae and Lawler, 2000; Bae et al., 2003; Carlson et al.,

2006; Fey and Bjorkman, 2001; Harel and Tzafrir, 1999; Katou and Budhwar, 2006;

Laursen and Foss, 2003; Panayotopouloe et al., 2003; Richard and Johnson, 2001;

Rodwell and Teo, 2005; Rodriguez and Ventura, 2003; Sels, et al., 2006; Tessema

and Soeters, 2006; Tzafrir, 2006). Specifically, Hitt et al. (2001) report direct and

moderating effects of human capital combined with strategies (service diversification

and geographic diversification) on organisational performance in professional service

firms.

2.7.2 Resource-Based View Theory

The logic behind the Resource-Based View theory is that resources possessing

advantage-creating characteristics such as “inimitability” and “non-substitutability”

drive organisational survival (Barney, 1991). Collis and Montgomery (1995) extend

these characteristics to include inimitability, durability, appropriability,

substitutability, and competitive superiority as the key ingredients of the Resource-

Based View theory. Further, eight criteria, complementarity, scarcity, low tradability,

inimitability, limited substitutability, appropriability, durability, and overlap with

strategic industry factors are highlighted by Amit and Shoemaker (1993). Fahy

(2000) classifies the advantage-creating characteristics associated with the Resource-

Based View into three key criteria: value, barriers to duplication, and appropriability.

Scholars (Khatri, 2000; Clulow et al., 2007) further argue that the effective

development of key resources embodying such features enable firms to achieve and

sustain competitive advantage. This view is supported by several scholars (Barney,

1991; Amit and Shoemaker, 1993; Peteraf, 1993; Fahy and Smithee, 1999; Barney

and Arikan, 2001; Barney, 2001; Priem and Butler, 2001), indicating that such key

resources offer a competitive advantage translatable into superior firm performance.

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Barney (2001) defines competitive advantage as activities which increase firm

effectiveness in ways that competitors are unable to replicate, resulting in economic

returns to the firm’s stakeholders (also called economic rent).

Intangible assets and capabilities are considered to embody the essential

characteristics of value, barriers to duplication, and appropriability (Fahy 2000), and

this view is supported by others (Barney and Wright, 1998; Smart and Wolfe, 2000).

Mueller (1996) argues that effective deployment of SHRM can result in competitive

advantage, provided resource mobility barriers are created. Furthermore, Becker and

Gerhart (1996) contend that competitive advantage originates from human resource

systems rather than the entire human resource pool.

Theoretical Relationship between Resource-Based View and Organisational

Performance Effects

Theoretically, it can be argued that the enhanced capabilities executives gain from

L&D dimensions (formal and informal), are intangible, situated within a unique

context, and possess inimitability characteristic. As per earlier discussions of the

literature, pertaining to the definitions of management and executive development, it

was observed by Castanias and Helfat (2001) that the managerial skills required at

the executive level appear to be tacit in nature and involve learning by “doing” with

no clear blueprint, which renders such skills quite difficult to replicate quickly.

Linking this notion back to the Resource-Based View, such skills embody a high

degree of inimitability and constitute a crucial component of organisational human

capital (Barney, 1991; Barney & Arikan, 2001, Barney, 2001).

Therefore, executive L&D reflects some of the parameters of this view. Hence, the

effective deployment of the tacit "knowledge" resources derived from executive

L&D can increase firm effectiveness in ways that competitors are unable to replicate,

thereby providing economic rent (competitive advantage). Such intangible resources

may include the tacit knowledge that executives develop through interactions with

various networks and business associations, which embody some inimitable

characteristics and features, which can be leveraged for competitive advantage.

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Some researchers (Hunt and Morgan, 1995; Collis and Montgomery, 1995; Fahy,

2002; Wilcox-King and Zeithaml, 2001) posit that the competitive advantage gained

through intangible assets and capabilities translates into superior firm performance,

measurable in terms of financial, increased profits/sales, increased sales, or market

share.

Further, empirical testing of the Resource-Based View has been conducted by

several studies in the last two decades. Henderson and Cockburn (1994) measured

the value, rarity, and imitability of competence that has an impact on research

productivity in pharmaceutical firms. In the context of Spanish manufacturing firms

(over ten employees), Esteve-Perez and Manez-Castillejo (2008) confirmed that a

firm’s strategy for developing specific assets (advertising and creating research and

development policy) may enhance its ability to adapt to the environment and

improve its survival prospects.

Ray et al. (2004) observed that intangible and socially complex capabilities

contribute to customer service enhancement. Importantly, Newbert (2007) reported

that the enhancement of core competencies contributes to competitive advantage and

firm performance. However, the Resource-Based View has been critiqued as a static

theory which has paved way for the formulation of the Dynamic Capability theory.

2.7.3 Dynamic Capability Theory

Countering the critique of scholars against the static assumption underpinning the

Resource-Based View, some authors (Eisenhardt and Martin, 2000; Priem and Butler

2001; Barney, 2001) derived several hypotheses hinging on some aspects of the

Resource-Based View (i.e. value, rarity, and imitability). Further defence is based on

equifinality (e.g. difficulty to define appropriate boundaries of a specific industry,

inappropriate assumption about the technological and competitive stability), product

market (i.e. factor market/product market model), and the adoption of the Resource-

Based View is recommended to address the questions of strategic alternatives, rent

appropriation, and strategy implementation.

The defence mounted by Barney (2001) failed to stymie the emergence of a dynamic

position which extends the Resource-Based View to account for the evolutionary

nature of firm resources (Wang and Ahmed, 2007. Furthermore, Helfat and Peteraf

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(2003) and led to the introduction of the concept of capability lifecycle to underpin

the "Dynamic Resource-Based" or Dynamic Capability theory.

Market dynamism has been cited to be the antecedent of dynamic capabilities that

drive development and firm performance (Wang and Ahmed (2007). Several

definitions of dynamic capability have emerged. Teece et al., (1997) define dynamic

capability as the ability of firms to integrate, build, and reconfigure internal and

external competencies to address rapidly changing environments. From the process

perspective, Eisenhardt and Martin (2000) define dynamic capabilities as “the firm’s

processes that use resources – specially the processes to integrate, reconfigure, gain

and release resource – to match and even create market change”. From the “input –

transformation – output” process position, dynamic capabilities are explained by

Cepeda and Vera (2007) as the configuration of resources and operational routine

changes.

From the behaviour perspective, Zollo and Winter (2002) consider dynamic

capability to be a learned and stable pattern of collective activity through which

organisations systematically generate and modify operating routines in pursuit of

improved effectiveness. Importantly, Ambrosini and Bowman (2009) cite a number

of internal and external factors which shape dynamic capabilities; some of the

internal factors include managerial behaviour (e.g. managers’ perceptions of the

environment, leadership), L&D, the existing set of resources, and social capital.

From an SHRM viewpoint, Wright et al. (2001) argue that understanding and

developing of dynamic capabilities is facilitated by management systems that

promote and transform both the stock and flow of knowledge within the firm and

enable the firm to constantly renew its core competencies.

Theoretical Relationship between Dynamic Capability Theory and

Organisational Performance Effects

The relationship between dynamic capability and organisational performance can be

highlighted by integrating the Dynamic Capability view with the Knowledge-Based

view. Drawing on the behavioural and SHRM perspectives advocated by Zollo and

Winter (2002) and Wright et al. (2001), executive L&D can be considered part of the

management systems and learned activities capable of improving organisational

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effectiveness. Advocates of the Knowledge-Based view (Griffith et al., 2006; Liao et

al., 2009) have conjectured that knowledge resources can generate dynamic

capabilities and that learning serves as the bridge between knowledge resources and

the creation of dynamic capabilities (Heijden, 2004). The notion that learning

mechanisms enhance dynamic capabilities sheds light on the evolution of dynamic

capability within organisations (Zott, 2003; Zollo and Winter, 2002). Empirically,

some researchers (Ju et al., 2006; Zhang et al., 2004) have posited that knowledge

and learning are instrumental in determining innovative capabilities at the individual

and organisational levels, and such innovative capabilities can influence

organisational stability in dynamic markets (Lee and Tsai, 2005).

The process of converting knowledge resources of into organisation performance can

be explained further through the socialisation, externalisation, combination, and

internalisation (SECI) model (Nonaka and Takeuchi, 1995). According to this model,

the organisational knowledge creation view of the firm involves conversion

processes between tacit (individual) and explicit knowledge. This processes moves

through four non-linear steps, socialisation, externalisation, combination, and

internalisation that help synthesise individual learning into objective and socially

shared knowledge across the organisation (Nonaka et al., 2001). Extending the view

that executive L&D generates dynamic capability can offer a theoretical link between

dynamic capability and organisational performance, based on the SECI model as

follows:

Socialisation (Tacit to Tacit): As executives engage in informal learning activities

and social interactions with peers and customers, they develop tacit knowledge

through face-to-face or knowledge sharing experiences. Such tacit knowledge may

be difficult to formalise and can be acquired only through shared experience.

Experience-based knowledge is considered important in the development of tacit

knowledge, which in turn, drives innovative and competitive advantage (Byosiere

and Luethge, 2008).

Externalisation (Tacit to Explicit): The tacit knowledge executives gain from the

socialisation and informal learning can be converted into explicit knowledge by

externalisation (e.g. written procedures, strategies, and process maps), thereby

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serving as a facilitator for embedding the new knowledge to be disseminated across

the organisation (Ambrosini and Bowman, 2001).

Combination (Explicit to Explicit): The newly explicit knowledge disseminated

across the organisation can then be integrated with existing explicit information

(organizing, integrating knowledge), combining different types of explicit knowledge

to develop innovative solutions and products (Byosiere and Luethge, 2008), resulting

in superior organisational performance (Tontini and Silveira, 2007).

Internalisation (Explicit to Tacit): The internalisation process involves a process of

continuous and collective reflection and the identification of connections and

patterns (executive learning and development) to drive continues organisational

effectiveness and challenge the status quo, developing further dynamic capability.

In sum, the SECI model therefore creates a knowledge spiral across the organisation,

leading to the creation of innovative services and products, eventually resulting in

positive organisational performance effects (Wang and Ahmed, 2002; Narver et al.,

2004; Mavondo et al., 2005).

An alternative to the dynamic capability and organisation performance link can be

formulated on the basis of the market-related learning perspective. According to

Sinkula (1994), market-driven learning entails the development of market

knowledge, which potentially influences organisational performance through the

development of customer-centric products and services. Such new products and

services are likely to result in increased customer satisfaction, which will in turn

generate customer loyalty (Bennett and Rundle-Thiele, 2004), leading to increased

organisational performance (Yeung et al., 2002; Keiningham et al., 2003).

Dissatisfied customers may be inclined to transact with competitors (Barlow and

Mail, 2000), leading to shrinking market share and organisational performance for

the organisation in question. In essence, the dynamic capability and market-

knowledge developed through frequent interaction with customers can result in

enhanced organisational performance effects through the provision of customer-

centric products and service (Jones and Suh, 2000).

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2.7.4 Resource Dependency Theory

The Resource Dependency theory hinges on securing control over resources and

inputs in order to drive superior firm performance (Pfeffer, 1972, 1976; Pfeffer and

Novak, 1976). This theory was pioneered in the 1970s by Pfeffer and his colleagues

(Pfeffer, 1972, 1976; Pfeffer and Novak, 1976; Pfeffer and Salancik, 1978) and

consolidated by an array of subsequent empirical studies (Walter and Barney, 1990;

Hitt and Tyler, 1991; Finkelstein, 1997; Hillman, 2005; Hillman et al., 2007;

Bowden and Isch, 2013). Rooted in the field of financial economics, the Resource

Dependency theory suggests that firms will respond to unequal market relationships

by pursuing one of two strategies – “absorption” or “cooptation”. Absorption

involves engaging in acquisitions, mergers, or takeovers to end the dependency

relationship. On the other hand, cooptation typically involves the weak party

engaging in relationships with the dominant party to influence the behaviour of the

dominant party through political action or by offering its members positions on its

board of directors (Pfeffer, 2003; Hillman et al., 2009; Davis and Cobb, 2010).

The Resource Dependency theory maintains that directors can provide critical links

to the resources that a firm needs to survive and prosper (Pfeffer and Salancik, 1978).

Previous research findings (Gales and Kesner, 1994) in the field of corporate

restructuring activities, suggest that the absence of these links and decline in firm

performance are interrelated. In effect, when executives fail to manage corporate

resources effectively corporate performance is negatively impacted (Hillman et al.,

2000; Hillman et al., 2009), leading to buyout by competitors. Some of the critical

resources can be embedded within the tacit knowledge executives develop by

engaging in formal and informal development dimensions (including networking,

coaching, etc).

The organisational knowledge creation view of the firm, involving the conversion

processes between tacit (individual) and explicit knowledge (Nonaka and Takeuchi,

1995) based on the SECI model, helps synthesise individual learning into objective

and socially shared knowledge across the organisation (Nonaka et al., 2001).

Consequently, as executives enhance their capabilities through experiential learning,

the acquired knowledge can be converted into shared-knowledge through dialogue

with peers and subordinates, creating a knowledge spiral across the organisation that

75

can be applied to generate innovative services and products (Wang and Ahmed,

2002; Narver et al., 2004; Mavondo et al., 2005). Despite its popularity, the Resource

Dependency theory has been subject to one principal criticism. According to

Finkelstein, (1997), the theory is largely ahistorical and assumes that economic

transaction patterns are static and fails to account for dynamic interactions over time.

Theoretical Relationship between Resource Dependency Theory and

Organisational Performance Effects

Theoretically, the link between the Resource Dependency theory and organisational

performance can be established by combining the Knowledge Creation (Nonaka and

Takeuchi, 1995; Grant, 1996; Leiponen, 2006; Taminiau, et al., 2009), Leader-

Member exchange (Dansereau et al., 1975; Graen and Cashman, 1975), and Job

Demand Resource theories (Demerouti et al., 2001a, 2001b).

The knowledge view of the firm suggests that organisations that are capable of

acquiring critical operational knowledge faster than competitors can achieve a

competitive advantage against rivals (Chen and Lin, 2004; Zahra and George, 2002).

Knowledge and learning, according to some researchers (Ju et al., 2006; Zhang et al.,

2004), are instrumental to the creation of innovative capabilities at the individual and

firm levels and that such innovative capabilities can influence organisational survival

in dynamic market environments (Lee and Tsai, 2005). This view is embodied within

the Knowledge-Based theory, positing that the characteristics and effective

knowledge integration have consequences for organisation outcomes (Huang and

Newell, 2003; McEvily and Chakravarthy, 2002; Wang et al., 2004) and that internal

and external learning activities facilitate the acquisition, conversion, and application

of organisational knowledge stock and flow (Pablos, 2002). Moreover, some

researchers (Blackler et al., 2000; Badii and Sharif, 2003) argue that organisations

can acquire sustainable competitiveness by integrating different kinds of knowledge

in an effective manner. Knowledge integration processes enable organisations to

transform the tacit knowledge of a number of individuals (e.g. executives) into

tangible or intangible performance outputs (Huang and Newell, 2003). Enhanced

innovation performance was also found to be significantly correlated with knowledge

characteristics of firms, especially through enhanced knowledge integration

processes – acquisition, conversion, and application (Ju et al., 2006).

76

Consequently, as executives become adept at acquiring and combining knowledge

from external sources through informal and formal learning, they create an enabling

environment for the production of innovative services and products, which can

generate positive organisational performance effects (Hsiao, et al., 2011). Thus,

through knowledge acquisition and combination of processes, organisations can

secure control over critical resources and inputs in order to drive firm performance

(Nonaka et al., 2001). This process of gaining access to critical resources through

executive L&D reflects the Resource Dependency concept, given that such

"knowledge assets" can enable the organisations to control resources effectively to

gain competitive advantage (Pfeffer and Salancik, 1978; Nonaka et al., 2001). The

cycle of knowledge conversion, already discussed under the dynamic capability

section, applies here too. Thus, according to the organisational knowledge creation

view of the firm, the conversion processes between tacit (individual) and explicit

knowledge (Nonaka and Takeuchi, 1995) is based on the socialisation,

externalisation, combination, and internalisation (SECI) model. This helps to

synthesise individual learning into objective and socially shared knowledge across

the organisation (Nonaka et al., 2001). Thus, as executives enhance their capabilities

through learning and development, they acquire knowledge which can be converted

into shared-knowledge through dialogue with peers and subordinates, creating a

knowledge spiral across the organisation, which can be applied to generate

innovative services and products (Wang and Ahmed, 2002; Narver et al., 2004;

Mavondo et al., 2005).

Furthermore, by combining the Leader-Member exchange (Dansereau et al., 1975;

Graen and Cashman, 1975) and Job Demand Resource theories (Demerouti, et al.,

2001a: Demerouti, et al., 2001b), an explanation can be given for the connection

between Resource Dependency theory and organisation performance. Liao et al’s.

(2010) study findings provide empirical support to this connection by demonstrating

a statistically significant relationship between leader-member exchange and

employee creativity. It is however expected that the presence of distributed

leadership would be required for effects of executive L&D to be transmitted through

the leader-member exchange and job demand resource interactions. Thus, as

executives gain "knowledge resources" from L&D, the level of support they provide

to employees and direct reports will be enhanced. Through distributed leadership

effects, the job demand resource dynamics available to employees are enhanced;

77

resultantly, employees gaining access to resources through the distributed leadership

job demand resources and leader-member exchange interactions are likely to respond

with increased motivation and experiment with new ideas, thereby creating channels

of innovative services and products, which can generate positive organisational

performance effects (Nasution, and Mavondo 2008).

2.8 Theoretical Justification for Size and Sector Differences of the

Executive L&D Effects on Organisational Performance

2.8.1 Firm Sector Differences

Some scholars suggested that learning orientations differ across industrial sectors

(Lee-Kelly et al., 2007). According to Lee and Tsai (2005), learning orientation is a

mechanism that affects a firm’s ability to challenge old assumptions and facilitate

new techniques and methodologies. Baker and Sinkula (1999) view learning

orientation as the combination of mental models (Geus, 1998) and dominant logics

(Bettis and Prahalad, 1995) that are likely to influence a firm’s learning behaviour.

Several authors (e.g. Hyland et al., 2000; Dymock and McCarthy, 2006; Khadra and

Rawabdeh, 2006) have emphasised on the importance of learning orientation in the

manufacturing sector, and particularly, leadership is considered to be a crucial

enabling agent of learning in the manufacturing sector (Yeo, 2008). Furthermore,

Datta et al. (2005) examined how industry characteristics affect the relative

importance and value of HPWP systems and reported that the impact of human

resources systems on productivity is influenced by industry capital intensity, growth,

and differentiation. The results further suggest that the effects of HPWP on labour

productivity were pronounced in industries with low capital intensity or high growth

rates and that such industries are likely to include sectors characterised by a

combination of high discretionary behaviour and customer contact, which are all

features of the service sector.

However, support for greater applicability of HPWP in the service sector is not

universally accepted, as Comb et al. (2006), in their meta-analysis involving 92

studies, support the greater applicability of HPWP to the manufacturing

78

organisations than to the service firms; however, the impact of HPWP on

performance measures across the sectors was found to be invariant.

Furthering the debate on the deferential learning orientation across sectors, some

researchers (e.g. Taylor and Bain, 2003; Wright and Dwyer, 2003) suggest that

industries dependent on low-cost mass production will tend to have a high propensity

towards establishing administration-oriented HR departments and implement

predetermined systems of control. This highlights the possible viable effects of HR

structures across sectors on the deployment of L&D dimensions.

There are limited studies within the HRM/performance domain (e.g. Kalleberg and

Moody, 1994; Chandler and McEvoy, 2000; Comb et al., 2006) that have either

controlled for or highlighted the differences in learning orientations across sectors.

For instance, Kalleberg and Moody (1994) examined the sector differences

(nonprofit, public, and for-profit establishments) in terms of the application of

HPWP, defined in terms of opportunities for participation in decision making,

capacity for participation in team activities, and provision of incentives for

participation. The results indicate that nonprofit and public organisations were less

inclined to deploy performance incentives (gain sharing and bonuses) and multi-

skilling practices than for-profit organisations, where there was an increased

propensity to employ both self-directed work teams and offline committees. In

addition, some single-industry studies (e.g. Appleyard and Brown, 2001; Batt, 2002)

have controlled for intra-industry and segments-specific idiosyncratic characteristics

and have reported a difference in orientations.

Moreover, some researchers (e.g. Lien et al., 2006; Bhatnagar, 2006), consider

learning orientation to be vital to service firms. This notion is contrasted by others

(e.g. Sadler-Smith et al., 2001). Specifically, Sadler-Smith et al., (2001), in their

study examining the learning orientations of 300 manufacturing and service firms,

suggested that manufacturing firms are more likely to engage in active learning than

their service counterparts. Others (e.g. Jamali et al., 2009) reported non-significant

differences in the learning orientation in service and manufacturing firms. In

conclusion, the above-mentioned studies offer support for the expectation that

statistically significant differences are likely to exist in the learning orientation

between manufacturing and service firms.

79

2.8.2 Firm Size (SME/Non-SME) Differences

The Resource Dependency theory (Pfeffer, 1972; Pfeffer and Salancik, 1978; Hitt

and Tyler, 1991; Hillman, 2005), can be used to explain why the effects of executive

L&D on organisation performance are better in large firms than in SMEs, as size can

be used as a proxy for the level of resources available to an organisation (Pfeffer and

Salancik, 1978; Goldberg; 2012). Organisational size has been found to be correlated

to innovation and performance (Damanpour, 1992) and this relationship is modified

by organisational slack (Bowen, 2002). According to Bourgeois (1981), slack relates

to the resources in reserve that permit the adaptation of changes in strategy when

environmental shifts occur. Large organisations are perceived to have more slack and

are therefore expected to cope better with resource scarcity than SMEs. In addition,

some of the resource dependency and slack effects may apply to executive L&D

contexts, given that compared to small firms, large firms may have the extra resource

capacity to deploy sophisticated development approaches when environmental

changes occur (Mole et al., 2004). Furthermore, large organisations have the capacity

to hold power over other their supplier-chains can establish sophisticated learning

partnerships to create differentiated products, thereby obtaining competitive

advantage (Raymond and St-Pierre, 2004; Gardet and Mothe, 2012).

In addition, according to Resource-Based View theorists (Barney, 1991; Teece et al.,

1997; Teece, 2007; Winter, 2003), firms with superior resources are likely to pursue

unique strategies, which are not easily replicable and imitable by competitors.

Therefore, based on the Resource-Based View, it is expected that the effects of

executive L&D effects on organisation performance will be better in large firms than

in SMEs as the latter will lack the resources to pursue such unique strategies.

SMEs generally lack the internal structures, routines, and procedures which large

organisations utilise to absorb and transform knowledge in order to produce tangible

and intangible organisational outcomes (Zahra and George, 2002; Van Den Bosch et

al., 2003). In addition, most SMEs may often lack the managerial, entrepreneurial,

and technical skills required to identify and absorb new knowledge (Renko, 2001).

Moreover, given the skewed influence of owner-managers within small

organisations, characterised by reluctance to delegate power and share knowledge

and autocratic and defensive management behaviours, SMEs may be impeded from

80

effectively deploying L&D dimensions (Jones, 2003). In addition, some authors have

indicated that firm size has a significant effect on learning orientation (e.g. Belkhodja

et al., 2007). Specifically, Bierly and Daly (2007) reported that small firms were

likely to learn from suppliers, while large firms learned well from partnership and

consultants.

Moreover, Westhead and Storey (1997) state that training in small firms is different

from that in their large counterparts, with the latter likely to depend on externally

provided training and the former, on informal mechanisms. Small firms, according to

Westhead and Storey depend on informal work-related training and knowledge

owing to resource constraints. Because of such resource constraints, some SMEs will

possibly lag behind their large counterparts in the adoption of emerging knowledge

and technologies, possibly resulting in diminishing competitive advantage for such

firms over time (Mole et al., 2004).

Differential effects of SHRM dimensions on organisational outcomes in terms of

SME/Non-SME have been observed by some researchers (e.g. Brewster and Mayne,

1995; Brewster et al., 2006; Collins and Clark, 2003; Datta et al., 2005; Marginson et

al., 1993; Purcell, 1999; Huselid 1995). However, large firms may encounter

limitations in executive L&D, arising from the complexities in organisational

structure, and this can result in a slow transformation of learning processes, whilst

small firms may be able to disseminate and embed knowledge faster than large firms

because of the increased proximity of managers (Lant and Mezias, 1992).

According to the Resource-Based View and Resource Dependency theories, large

firms are expected to have increased resource advantages and can execute

complicated HR practices to achieve high performance (Collins and Clark, 2003;

Datta et al., 2005; Huselid, 1995). It is therefore expected that large firms (i.e. large

number of employees) will have the capacity to translate their resource advantage

into superior performance, compared to their small counterparts. For instance,

Collins and Clark (2003) examined the relationships between a set of network-

building HR practices, namely external and internal social networks of TMTs and

organisational performance, controlling for firm size. The results, based on data

gathered from 73 high-technology firms reported the effects of size on the

relationship between the HR practices and firm performance (sales growth and stock

81

growth). The effects of firm size on performance were found to be more favourable

to large organisations than to small firms. Referring back to the six dimensions of

executive L&D, discussed in previous sections the literature review, SMEs are

expected to engage in participative L&D, whilst non-SMEs, in a wide range of

activities owing to increased access to resources.

Similarly, Fey and Bjorkman (2001) controlled for firm size in a study examining the

effects of HRM dimensions on organisational performance and the results suggested

that large firms slightly outperformed small firms. In addition, Brewster et al. (2003),

in their study comprising a large (n = 2953) and multi-national sample, concluded

that compared to small firms, large firms are able to take advantage of economies of

scale, through the provision of complex HR systems, to generate superior

organisational performance outcomes. Based on the above notion, it can be argued

that although some small firms may be untouched by bureaucratic obstacles existing

in larger organisations, small firms may lack the capacity to reap the economies of

scale associated with a large organisational size. To recap, it is highly possible that

firm size is likely to have an inverse effect on executive L&D.

Conclusions

To recap, the above section has discussed the theoretical reasons behind why

executive L&D will affect organisational performance, drawing on a number of

interrelated theoretical concepts; Resource-Based View (Barney, 1991; Barney,

2001; Clulow et al., 2007), Dynamic Capabilities (Chien and Tsai, 2012; Eisenhardt

and Martin, 2000; Zott, 2003), Human Capital (Rastogi, 2002; Ulrich, 1997; Wright

et al. 2001), and Resource Dependency (Pfeffer, 1972; Pfeffer and Salancik, 1978;

Hitt and Tyler, 1991; Hillman, 2005). In addition, the theoretical and empirical

justifications for why firm size differences will have a bearing on the effects of

executive L&D on organisational performance have been discussed, in light of the

Resource-Based View and Resource Dependency theories. Finally, based on the

learning differences evident across sectors (e.g. Hyland et al., 2000; Taylor and Bain,

2003; Wright and Dwyer, 2003; Dymock and McCarthy, 2006; Lee and Tsai, 2005;

Khadra and Rawabdeh, 2006; Lee-Kelly et al., 2007), the justifications for why

sector differences will have a bearing on the executive L&D effects on organisational

performance have been highlighted.

82

2.9 Executive and Leadership Development and Organisational

Performance

Organisations today are operating on strict budgetary regimes owing to capital

constraints and other challenges in the business environment (Murray, 2011).

Colossal pension deficits, spiralling stakeholder demands, and cost of capital

burdens, have potentially intensified these pressures, implying that allocation of

financial resources, including funding of executive development activities is

scrutinised and value maximisation is often a common mantra across organisations

(O’Connor et al., 2006; Murray, 2011). As a result, all investments, including those

required to enhance managerial capabilities, are expected to yield commensurable or

superior returns that are reflected in bottom-line organisational performance effects

(Garavan et al., 2008).

In recent years, the general interest in the field of leadership, management, and

executive development has grown rapidly within academic circles and in the

professional arena. However, a significant proportion of such studies tend to be

exploratory in nature or centred on the characteristics of effective management and

executive development. Few studies have focused specifically on establishing the

relationship between executive L&D and organisational performance. Even where

such studies exist, they do not deploy a comprehensive set of measures to assess the

effects of development dimensions on performance.

An important meta-analysis conducted by Collins (2002), which reviewed studies

evaluating the performance implications of managerial leadership development

between 1986 and 2000, will be pivotal to this research and will serve as a baseline

for further reviews.

Collins conducted a search of published and unpublished management development

studies, locating approximately 1000 titles, abstracts, and articles. Of these studies,

only 18 included performance outcomes in their analyses. The management

development dimensions were categorised through a framework into four main areas:

i. Development Relationships: experiences in work settings in which other

individuals influence the manager’s personal development, such as one-to-one

mentoring and coaching

83

ii. Formal Training Programmes: structured training programmes designed

to develop the individual manager

iii. Job Assignment: assignment to an entire job, involving redesigning a

system or part of a job; serving in a temporary task force

iv. Structured Experiences: group activities that include goal-directed, live

action and task-based interactions such as leaderless group discussions, simulations,

and targeted exercises.

Twelve of the eighteen studies utilised strategic leadership as the primary dimension,

two studies focused on team management, and another two focused on the effects of

supportive environments on executive development activities. The remaining two

studies were related to employee development and human resource systems. Out of

the eighteen studies reviewed, only two focused on evaluating the impact of

management development dimensions on the organisational financial performance,

whilst the majority (15) focused on evaluating system performance effects. This

trend does not align with the trend observed in the HRM-performance literature,

where financial measures have been more popular than non-financial measures.

The two studies specifically related to management development and cited by Collin

are briefly discussed as follows: Moxnes and Eilertsen’s (1991) study involved 329

Norwegian private-sector supervisors (foremen), and evaluated the effects of

management training on organisational climate; they used a questionnaire design

employing repeated testing and statistical controls. The measurement instrument

used in the research was Argyris’s learning models I and II. The outcome of the

study indicated that most process-oriented training programmes did not change the

organisational climate, as perceived by the supervisors, but rather interpersonal

conflicts and supervisory skills generated a positive impact on climate. The authors

argued that increased supervisor awareness of organisational climate factors

facilitated learning at work and this resulted in improvement in organisational

climate effects.

Watad and Ospina’s (1999) study involved evaluating the effects of managerial

training on organisational outcomes, exemplified in terms of effective vertical and

horizontal integration, as employees from different levels and functions learned to

work together on problems and issues. The study involved 17 mid-level managers

84

and utilised individual and group interviews to measure the effects of training on

organisational performance. Positive effects of training on performance were

reported and the authors support designing of management development programmes

suitable for employees at all levels and functions, suggesting that this approach will

provide a strategic advantage for the organisation because it supports horizontal and

vertical integration.

Whilst both studies shed some light on the effects of management development on

organisational performance, they have some limitations. Moxnes and Eilertsen’s

(1991) study was based on the lower echelon non-managers, as the respondents were

mainly supervisors, whilst Watad and Ospina (1999) focused on 17 mid-level

managers – a small sample size.

Only six out of the eighteen studies were clearly related to the executive level and a

variety of terminologies such as business leader, private industry business leader,

senior executive, CEO and vice president were used to describe executives.

Strikingly, all these six studies reflected elements of leadership dimensions such as

transformational leadership, organisational change, and leadership style, with one

exception focusing on leadership training programme.

A key observation made among the six executive-level studies reviewed by Collins

relates to the nature of measurement instruments utilised to assess performance.

These were mostly leadership orientated with some typical examples being

leadership behaviour questionnaire, repertory grid technique measuring ideology,

leadership style, Rotter’s locus of control, and Jackson’s personality inventory.

Hence, although these studies are published under executive development labels, the

actual issue being addressed pertained to leadership. In effect, Collins’ review was

composed of a mixed range of studies investigating the performance implication of

both leadership and management development.

The main finding of Collin’s study is that there are some unanswered questions

regarding the effectiveness of executive development measures in evaluating

intended organisational outcomes. This is particularly so for evaluation models and

measures targeted at the enhancement of organisational performance.

85

To establish the currency of information, a review of literature was undertaken

focusing on the period spanning from 1990 to 2010 to help identify specific studies

addressing the impact of management and executive development dimensions on

organisational outcomes. This period was selected in order to capture any potential

studies omitted from the literature review conducted by Collins (2002).

The criterion for the initial search was the presence of the words “evaluation”,

“assessment”, “outcomes”, “impact”, “effectiveness” and “influence” which

were permutated with the following words, “leadership development”,

“managerial training”, “management development”, “executive development”,

“management education” and “management skills”. The search was conducted

in the following academic databases: Emerald, Sage Journals Online, Science

Direct, IngentaConnect, Wiley Interscience, and SwetsWise, yielding approximately

70,000 articles. Excluded from this list are dissertations, unpublished studies, and

studies in other databases such as Goggle Scholar, which may be relevant to this

research. The 70,000 articles were then categorised by type: empirical, conceptual,

case studies, general review, research papers, and literature review. All other

categories of studies other than empirical research were omitted, leaving behind 650

articles.

After detailed examination of the abstract, introduction, and conclusion sections,

importance, and relevance to the topic, 307 articles covering irrelevant details were

removed. After further comprehensive analysis, 296 articles, which failed to meet the

selection criteria, were eliminated. Based on the two phases of review, 9 articles

were finally included in the systematic literature review. In sum, although a large

number of articles appear to be associated with the concept of executive learning and

management linked with organisational performance, the majority of these studies

were explorative and conceptual in nature with very few underpinned by empirical

analysis.

Furthermore, some of the empirical studies captured under executive and

management were actually addressing entirely different issues and these were

therefore discarded.

86

Table 2.2: Summary of Selected Studies Evaluating Impact of Executive and

Leadership Development on Organisational Outcomes (2000–2011).

Performance Author

(s)

Journal

Dimension

Type

System Capabilities Behaviours Financial

Bowles,

et al.

(2007)

Leadership &

Organisation

Development

Journal

Coaching Achievement

of personal

goals, and

assessment of

nine leader

competencies

Jones, et

al.

(2006)

Leadership &

Organisation

Development

Journal

Coaching Self-reported

managerial

flexibility

Thach, E.

C. (2002)

Leadership &

Organisation

Development

Journal

Coaching

& 360

feedback

process

Multi-rater-

derived

leadership

effectiveness.

Seppane

n-

Järvelä,

R. (2005)

Journal of

Management

Development

Internal

Manageme

nt

Developm

ent

Organis

ational

Develop

ment

Hunt, J.

W. and

Baruch,

Y.

(2003)

Journal of

Management

Development

Interperson

al skills

training

Competencie

s and skills

improvement

Velsor,

E. V. and

Ascalon,

E. (2008)

Journal of

Management

Development

Leadership

developme

nt level

Ethical

behaviour

Boaden,

R. J.

(2006)

Leadership &

Organisation

Development

Leadership

developme

nt

Change

87

Performance Author

(s)

Dimension

Journal Type

System Capabilities Behaviours Financial

Journal

Pastor J.

C. and

Mayo M.

(2008)

Leadership &

Organisation

Development

Journal

Leadership

orientation

Goal

orientation

Mabey

and

Ramirez.

(2005)

Manageme

nt

Developm

ent

Recent/pr

ojected

change in

sales

turnover

The studies outlined in Table 2.2 above can be broadly grouped under four main

categories: coaching, executive education, leadership development, and

management development. Three particular studies within the group focused on

coaching as a development dimension (Bowles et al., 2007; Jones et al., 2006; Thach,

2002) and are examined further. Bowles et al. (2007) using the survey methodology,

focused on the effects of coaching on middle managers and executives in the US

Army, in relation to the achievement of specific goals (recruitment/sales, quality of

life, and leadership) over a 12-month period. Although the measured outcomes were

related to coached participants' achievement of quota and personal goals, assessment

of nine leadership competencies, and buy-in over the one-year coaching period, other

dimensions were also assessed. The evaluation was extended to capture the efficacy

of the coaching process, specifically the intensity of coach-participant interactions

(i.e. the degree of involvement and buy-in of participants in the coaching sessions)

and involvement of coaches in coaching activity.

Personal goal attainment over the coaching period was determined by calculating the

percentage of goals achieved (i.e. a participant's total number of achieved goals

under a particular category divided by the total number of goals set initially). Each

participant was rated by an assigned coach to assess the growth observed throughout

88

the coaching process, in nine leadership competencies. Consequently, these ratings

also highlighted the dynamics of the learning process from the coaching experience

point of view. The performance measure that can be directly linked to organisational

outcomes is the achievement of set recruitment quotas by both levels of managers.

Specifically, a percentage quota achievement metric was used to evaluate the

recruiter (i.e. a percentage of 100 reflects fully meeting the recruiting objectives set

for a specific recruiting area) over the specified period.

The study findings suggest that coached managers outperform their un-coached

experienced counterparts. The impact of coaching was most significant among

middle managers compared to among executive managers. Overall, both groups of

participants demonstrated growth in some dimensions of recruiter-leader

competencies and achievement of self-set goals.

The evaluation criterion selected for this study was expansive in the sense that it

addressed both personal and organisational objectives. However, the limited impact

of coaching on senior managers is quite intriguing, given that coaching, as a

technique, is becoming acceptable as one of the key mechanisms for developing the

capabilities of senior executives (Thach, 2002). Again, the level or seniority of the

executives in question is not quite explicit, typifying the usual conundrum associated

with the applicability of the term “executive” within the literature.

Jones et al. (2006) investigated the influence of executive coaching on managerial

flexibility by adopting a repeat-measure approach; this study involved 111 leaders

who participated in executive coaching over a three-month period. Each participant

was questioned prior to, during, and after coaching. Three main individual

flexibility-scaled measures (proactivity, adaptability, resilience) and general

flexibility were assessed during the coaching sessions. In conclusion, it was posited

that executive coaching generated positive effects on the development of managerial

flexibility, indicating a significant linear trend in the data, with flexibility scores

increasing with time. Although these results provide some support for the argument

that executive coaching is a developmental tool that can positively improve a

manager's level of flexibility, much of the evidence presented by the measures is

skewed towards behavioural outcomes as opposed to the achievement of clear

organisational outcomes or objectives.

89

Thach (2002) examined the quantitative and combined impact of executive coaching

and 360-degree feedback process on leadership effectiveness. Although data from

this study was elicited from a single organisation – a mid-size, global,

telecommunication firm with headquarters in western USA, two clear criteria were

imposed to ensure that the total sample of 281 executives constituted directors, vice-

presidents, or employees identified as high-potential managers with over six months

of continuous experience. Importantly, the coaching process was linked to the

achievement of strategic organisational goals. The action-based research concluded

by demonstrating a positive relation between executive coaching and increased

leadership effectiveness. The evaluation was based on a 360-degree survey of direct

reports, peers, and managers. The outcome of the study indicated a 55% increase in

leadership effectiveness of participants. Further evidence identified through

qualitative data illustrated some connection between the number of coaching sessions

and self-perceived leadership effectiveness.

The conclusions reached by Thach (2002) suggest that executive coaching generates

positive effects on leadership effectiveness and assumes a strategic link between

development dimensions and organisational goals. However, the organisational goals

to which executive coaching was linked are not clearly specified by the author.

Furthermore, as admitted by Thach, the combination of coaching and 360 degree

evaluations introduced some difficulties in terms of identifying how coaching alone

influenced leadership effectiveness. Another limitation in this study is related to the

lack of a clear definition of leadership effectiveness, as the term could attract

differential interpretations and perceptions.

Similarly, Seppanen-Jarvela (2005) follows a qualitative approach and action-based

research to examine the organisational performance effects of a two-year

development programme, within a single firm, involving 41 respondents at all levels

of management. Although this study offers a unique approach by following the

action orientation, it exhibits one primary shortfall: the conclusion that organisational

development was enhanced as a result of the management development programme

was not clearly quantified or linked to specific organisational outcomes.

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Hunt and Baruch (2003) assessed how 252 executives (chief executives, heads of

functions, divisional or regional managers) from 48 different organisations

developed a cluster of interpersonal skills via a structured training programme. The

main dimensions of the training were as follows:

Structuring: envisioning, target setting, prioritizing

Motivating: enthusing individuals, team building, innovating

Assessing/rewarding: giving positive and negative feedback,

coaching, encouraging development

Leading: giving direction, sensitising, focusing, information

searching, scanning, and differentiating

Utilising a longitudinal methodology and a multi-rater approach, the data were

analysed through cross-comparison of the skill profile of senior managers before,

during, and after the training programme. Although this study focused on a narrow

dimension of executive development, it has some strengths, conveyed through the

details of the data analysis. Utilising cluster analysis, the study demonstrates the

variable impact associated with different clusters of skill, following the training

incidence. For instance, it was observed that decision-making and one-to-one skills

were far less affected by training deployment than goal setting, which improved

considerably after the training programme. Overall, the impact of training on

executive development measured in terms of subordinate perceptions was negative as

only 2 of the 14 cohorts of pre/post surveys indicated statistically significant

improvements in the participant manager’s performance both at the individual and

aggregate levels.

The limited effectiveness of training on organisational performance reported by

subordinates of managers who participated in this training programme could be

attributed to the previous observation by Hunt and Baruch (2003), related to the

sensitivities that some executives associate with “structured team-based training”.

Such sensitivities may limit the willingness of executives to experiment during

group-based training programme, thereby leading to reduced skill acquisition and

transfer.

Van Velsor and Ascalon (2008) evaluated the effects of a Centre for Creative

Leadership Development programme on organisational outcomes, in terms of how

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participants achieved both personal and organisational goals, after completion of the

programme. When executives, peers, and direct reports were asked to rate the effects

of manager’s participation in the leadership development programme on

organisational outcomes, most of the respondents cited increased focus on

organisational or departmental strategy and goal setting with varying emphasis.

Approximately, 75% of the peers, 71% of the participants, and 56% of the direct

reports perceived increased focus of participants in these areas. Although such results

are presented in support of the efficacy of the leadership development programme,

the authors fail to specify the level of the managers involved in the study as well as

the detailed content of the programme that was offered, making it quite difficult to

validate the results or compare them with other studies.

Similarly, Boaden (2006) conducted a qualitative evaluation of an NHS-sponsored

leadership development programme for senior managers, based on self-reported

feedback from participants. The core component of the programme incorporated

blocks of teaching, residential activities, service improvement projects, and web-

supported learning.

The studies reviewed above reflect a mixture of leadership and executive

development, and not just the latter. In addition, studies specifically focusing on the

organisational performance effects of executive development are scarce and past

studies tend to focus on individual behavioural and system effects, rather than

organisational outcomes of executive development.

The final study departs from the observed trend. Specifically, Mabey and Ramirez

(2005) examined the relationship between management development and

productivity in their study involving 601 privately owned companies across Europe

(Denmark, France, Germany, Norway, Spain and the UK). Productivity was

measured in terms of financial performance. Financial growth was measured by the

degree of recent/projected change in sales turnover divided by the number of

managers employed. This data was accessed from the Amadeus database in 2002 and

covered 179 (30%) of the 601 companies surveyed.

It was observed that large organisations were more likely to utilise management

development systems than small firms. In addition, organisations which successfully

integrated business and HR strategies reported increased benefits of management

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development systems, favourable management development ethos, and improved

perceived importance of management development. The strategic and long-term

focus of management development activities was reflected significantly in the

amount/diversity in management development and in the Amadeus index of firm

productivity. In terms of country-specific results, firms in Germany, Norway, France,

and Denmark showed no significant link between management development and

productivity, suggesting that firms in these countries resemble firms in the UK,

which served as the baseline country for the study.

The authors concluded that some of the productivity impact was attributable to size

effects, implying that large organisations obtain high performance through

management development dimensions. Furthermore, the highly significant

relationship between perceived importance of management development and

productivity suggests an additional and statistically significant value from advancing

long-term approach to developing managerial capability. In contrast, no relationship

was found between HR strategy, management development ethos, and management

development systems and organisational productivity.

The review of the research examining the effects of top leadership and executive

development on organisational performance highlights the neglect of non-financial

aspects of performance such as innovation, customer service, and employee

engagement in favour of financial aspects.

Summary

The review of the literature on the effects of leadership/executive development on

organisational performance highlights that only a few studies have actually isolated

executive learning and development, and examined the impact of this construct on

firm performance in sufficient detail. This observation implies that further research

in this area can provide further insight to researchers and practitioners in the field of

executive development (Mabey, 2002).

The paucity of research on the impact of leadership/executive learning and

development on organisational performance may be attributed to a number of factors.

One of which is the assumption that training and development effects accrue over

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time, compounded by difficulties in isolating and measuring how such activities

translate into bottom line organisational performance. This view is popularised by

the “black box” concept of organisational inputs and outcomes conundrum. Closely

connected to this is view is the difficulty of devising authentic mechanisms to track

the link between development dimensions and improvement in management

capability and organisational outcomes (Collins, 2002).

The observed dearth of studies investigating the effects of leadership development on

organisational performance may be partly due to the emphasis placed by scholars on

stand-alone individual leadership theories, and how such theories influence single or

multiple organisational outcomes (e.g. Avolio and Bass, 2002; Walumbwa and

Schaubroeck, 2009; Walumbwa et al., 2010, 2011; Yukl, 2010; Muchiri et al., 2012).

For example, transformational leadership has been linked to employee attitudes and

behaviours (Judge and Piccolo, 2004; Kirkman et al., 2009; Walumbwa et al., 2007;

Wang et al., 2012), organisational commitment, job satisfaction (Walumbwa et al.,

2005; Steyrera et al., 2008), follower work engagement (Zhu et al., 2009), and

innovation (Aragon-Correa et al., 2007; Samad, 2012).

In sum, although significant strides have been made in the field of executive

development and performance literature over the last few decades, studies focusing

specifically on demonstrating the effects of engaging in such activities on

organisational productivity are still scant. Moreover, the few existing studies, fail to

represent a wide contextualisation of development and learning, reflective of

executive managers. Novel and tacit forms of L&D, which may be appealing to

executives, such as learning through networking, attending seminars, team away

days, teleconference calls, and self-directed learning, appear to attract limited

attention of researchers.

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2.10 Organisational Performance Measurement

There is a prevailing view that the value created by a firm should be driven by the

income generated for the owners (Barney, 1995). Specific reference was made to

Boselie et al’s. (2005) observation in their detailed analysis of a cross-section of 104

studies evaluating the effects of HRM on organisational performance, in which

financial measures were found to dominate almost half of the sampled articles.

However, the over-reliance on financial measures of organisational performance was

echoed previously by some researchers such as Venkatraman and Ramanujam

(1986), who critiqued the narrow definition of performance concentrating on

outcome-based financial indicators, which only reflect the fulfilment of the economic

goals of firms. Furthermore, Venkatraman and Ramanujam argued against the

narrow measure of “financial performance” prominent in the management literature

and called for broad measures of business performance, encapsulating both financial

and non-financial (e.g. innovation, product quality, market share) indicators to

account for multiple stakeholder goals.

Similarly, drawing on the competing values framework (CVF) developed by Quinn

and Rohrbaugh (1981, 1983), it is possible to develop a wide measure of

organisational performance, encompassing financial and non-financial indicators.

The central point of the competing values framework is that, organisational

effectiveness is influenced by the ability to satisfy multiple performance criteria,

based on four value sets that comprise a combination of two dimensions: flexibility

versus control and internal focus versus external focus.

In addition, subjective measures of performance are utilised and a composite

measure has been utilised by some authors (e.g. Katou, 2008; Akhtar et al., 2008). In

the field of SHRM, subjective measures of performance have been applied in

numerous studies examining HRM and organisational performance effects (e.g. Bae

et al., 2003; Bennet et al. 1998; Bae and Lawler, 2000; Boxall and Steeneveld, 1999;

Haung, 2000; Hartog and Veburg, 2005; Panayotopoule et al., 2003; Paul and

Anantharaman, 2003; Rodrinez and Vetura, 2003; Snell and Youndt, 1995; Sels et

al., 2006; Tzafrir, 2005; Wright et al., 2003).

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Some researchers (e.g. Geringer and Hebert, 1991; Powell, 1992; Wall et al., 2004)

have shown that subjective measures of firm performance correlate well with their

objective counterparts; nevertheless, the potential for social desirability bias is strong

with the former approach (Gerhart et al., 2000b). However, a meta-analysis by

Bommer et al. (1995) found that performance evaluation had correlations of only

0.27 and 0.39, respectively, with objective and subjective measures, giving empirical

support for the application of the latter approach.

Researchers have called for the use of multiple organisational performance variables

(Chenhall and Langfield-Smith, 2007). Therefore, following this recommendation

five single-item measures of organisational performance (financial, market share,

innovation, employee engagement, and customer service) will be adopted to reflect

broad stakeholder goals and the competing values framework.

Goh et al. (2012) advocate that the assessment of learning capability should include

both financial and non-financial performance measures to support their argument that

learning capability can be linked to tangible results. Thus apart from profitability, the

use of other organisational performance measures such as customer satisfaction,

market share, innovation, and employee engagement is warranted.

Traditionally, profitability is expressed as a ratio of revenue over cost.

This definition is supported by previous studies (e.g. Sumanth, 1984; and Sink,

1985), and perceived financial performance (over the past 3 years) is employed in a

number of studies in SHRM (e.g. Bae et al., 2003, Hartog and Veburg, 2005; Sels et

al., 2006).

Customer satisfaction has been defined as a post-consumption assessment regarding

a product or service gained by an end-user (Bennett and Sharyn Rundle-Thiele, 2004;

Yuksel and Rimmington, 1998).

Innovation performance is defined in terms of processes which bring added value

and novelty to an organisation, its suppliers and customers through the development

of new procedures, solutions, products, and services as well as new methods of

commercialisation (Knox, 2002; McFadzean, 2005).

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Market share is viewed as an important indicator of organisational brand, product, or

service performance in the market place and is enhanced through the creation of new

product or service (Terui, 2004; O’Regan, 2002).

Employee engagement, according to Schaufeli et al. (2002), is a positive, fulfilling,

work-related state of mind that is characterised by vigour, dedication, and absorption,

not reflecting a momentary and specific state, but persistent and pervasive affective-

cognitive behaviour.

Single-item measures, rather than multiple-item measures, were applied in this study,

and this corresponds with the approach followed in other studies in the

HRM/performance literature. For example, Katou (2008) applied six single-item

organisational performance measures: effectiveness, efficiency, development,

satisfaction, quality, and innovation. Similarly, Som (2008) utilised six single-item

subjective performance measures: level of productivity, operating efficacy, growth

rate of revenue/sales/level of activity, financial strength (liquidity/reserves,

borrowing capacity, etc.), market share/profitability, and innovation (product,

process, systems and managerial).

2.11 Conclusions and Development of a Conceptual Research Model

In the critical review of the literature, three most popular (Burgoyne, 1988;

Mumford, 1993; Louma, 2005) models of management and executive development

were critiqued. Louma’s (2005) model offered an integrated approach to the

executive L&D measure, which has been expanded to include six dimensions:

structured, participative, network-related, self-directed and experiential, and strategic

learning. This reflects both formal and informal domains and ambidextrous learning

(Benner and Tushman, 2003; Lubatkin et al., 2006; Li and Lin, 2008). The

expectation is that the integrated measure of executive L&D is likely to generate

positive effects on both organisational performance.

Consequently, the theoretical reasons behind why executive L&D will affect

organisational performance, drawing on a number of interrelated theoretical concepts

– Resource-Based View (Barney, 1991; Barney, 2001; Clulow et al., 2007), Dynamic

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Capabilities (Chien and Tsai, 2012; Eisenhardt and Martin, 2000; Zott, 2003),

Human Capital (Rastogi, 2002; Ulrich, 1997; Wright et al. 2001) – have been

formulated and discussed. In addition, the theoretical and empirical justifications for

why firm size and sector have a bearing on the effects of executive L&D on

organisational performance have been discussed.

Furthermore, a review of the literature on the effects of executive and leadership

development revealed that only few studies have actually isolated executive L&D

and examined the impact of this construct on firm performance in sufficient detail.

The result of this study will highlight the most progressive executive L&D

dimensions that organisations can focus their resources on to develop human capital

required for maximum organisational performance impact (Collings and Mellahi,

2009), taking into account firm size and sector differences.

In sum, the initial research model and framework is formulated postulating that the

executive L&D measure (developed in section 2.6 of the literature review) will result

in positive organisational performance effects, modified by firm size and sector

effects (Figure 2-3).

Strategic

Experiential

Participative

Structured

Self-directed

Exe

cuti

ve L

earn

ing

&

Dev

elop

men

t

Network-related

Organisational

Performance

Firm

Size/Sector

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Figure 2.3: Initial Research Model and Framework.

Chapter Three: Research Methodology & Data Analysis

3.0 Introduction

This chapter outlines the methodological approach and data analysis procedures,

including the research design and strategy, adopted for this work. Hypotheses are

developed to confirm the theoretical basis for the positive relationship between the

two variables (executive L&D – “independent variable” – and organisational

performance measures – “dependent variable”). In addition, this chapter presents the

justification for using specific control variables to determine the effects of executive

L&D on organisational performance. Data collection methods and sample

description of respondents recruited for this research are a presented in this section.

For clarity, the data analysis section is split into two parts. The first part is dedicated

to the design of the executive L&D measure, including the procedures adopted for

exploratory, confirmatory, and discriminant validation. The second part focuses on

the justifications for selecting the ordinal regression technique to determine the

effects of executive L&D on organisational performance and the procedures for

confirming and disconfirming the research hypotheses. This section ends with the

rationale behind conducting Harman's common methods analysis, including the

specific results for this research.

As stated in Chapter One, that this research aims to enhance knowledge and

understanding of the effects of executive learning and development on organisational

performance based on a range of concepts; Resource-Based View, dynamic

capability, Resource Dependency and human capital concepts. Specifically, the main

objectives of the research are:

1. To develop a comprehensive measure of executive learning and development,

encapsulating formal & informal dimensions.

2. To evaluate the effects of executive learning and development on organisational

performance.

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3. To evaluate the possible moderating effects of firm size and sector on the

relationship between executive learning and development and organisational

performance.

Considering the above objectives as well as cost and time constraints associated with

mixed methodologies, interviews, and longitudinal methods, the survey approach

was selected as the most appropriate methodology for this research. Surveys are

usually associated with deductive approaches, commonly applied to business and

management research, and are usually applied to exploratory and descriptive studies

(Saunders et al., 2007). In addition, a single frame was adopted for this research

owing to time, financial, and logistical constraints. To ensure confidentiality and

anonymity, data protection requirements were strictly adhered to during the entire

process of the survey in compliance with current legislations. Moreover, qualitative

interview was deemed applicable to this research but was not implemented because

the survey methodology enabled data collection within reasonable time frames and at

a reasonable cost. In selecting the appropriate research approach, strategy, and design

for this work, consideration was given to different approaches, such as the positivism

versus interpretivism and inductive versus deductive perspectives, which are

discussed in detail in subsequent sections.

3.1 Research Hypothesis and Framework

In order to achieve the second and third research objectives, the theoretical

justification that executive L&D will generate a positive impact on organisational

performance (modified by firm size and sector) was based on a number of inter-

related theoretical concepts: Resource-Based View, Dynamic Capability, Human

Capital, and Resource Dependency theories which have been discussed in detail in

the literature review section.

The link between the human capital and organisational performance was discussed in

the literature review and it was posited that executive L&D generates human capital

(Rastogi, 2002; Mayo, 2001) which eventually results in competitive advantage

(Gratton, 2000) and positive organisational performance (Tomer, 2003; Chuang,

1999). The effects of Human Capital on organisational performance was explained

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through the Social Capital (Nahapiet and Ghoshal, 1998) and Job Demand Resource

theories (Demerouti, et al., 2001a: Demerouti, et al., 2001b). Through L&D (within

internal and external networks), executives gain increased access to new resources

(Sparrowe et al., 2001), which can be deployed to offer enhanced support and

resources to subordinates (Edmondson, 1999; Van Der Vegt and Bunderson, 2005;

Van Emmerik et al., 2011). As employees gain further support and resources from

executives, they generate creative solutions and products (Shore and Coyle-Shapiro,

2003; Wang et al., 2005; Yukl et al., 2009), leading to increased levels of customer

satisfaction (Babbar and Koufteros, 2008; Maddern et al., 2007) and consequently

enhanced organisational performance.

From an empirical perspective, several researchers have reported positive effects

between training and development (considered to be a source of human capital) and

organisational performance (Bae and Lawler, 2000; Bae et al., 2003; Carlson et al.,

2006; Fey and Bjorkman, 2001; Harel and Tzafrir, 1999; Katou and Budhwar, 2006;

Laursen and Foss, 2003; Panayotopouloe et al., 2003; Richard and Johnson, 2001;

Rodwell and Teo, 2005; Rodriguez and Ventura, 2003; Sels et al., 2006; Tessema

and Soeters, 2006; Tzafrir, 2006). Specifically, Hitt et al. (2001) report direct and

moderating effects of human capital with strategies (i.e. service diversification and

geographic diversification) on organisational performance in professional service

firms.

Some researchers (Hunt and Morgan, 1995; Collis and Montgomery, 1995; Fahy,

2002; Wilcox-King and Zeithaml, 2001) posit that the competitive advantage gained

through intangible assets and capabilities translates into superior firm performance,

measurable in terms of high financial profits or increased sales or market share. Ray

et al. (2004) observed that intangible and socially complex capabilities contribute to

enhanced customer service. Importantly, Newbert (2007) reported that the

enhancement of core competencies contributes to competitive advantage and

improved firm performance.

It has been noted in the literature review that learning mechanisms enhance dynamic

capabilities and shed light on the evolution of dynamic capability within

organisations (Zott, 2003; Zollo and Winter, 2002). Moreover, one popular definition

of executive L&D cited this as a source of dynamic capability (Espedal, 2005).

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Advocates of the Knowledge-Based view (e.g. Griffith et al., 2006; Liao et al., 2009)

have conjectured that knowledge resources can generate dynamic capabilities and

that learning serves as the bridge between knowledge resources and the creation of

dynamic capabilities (Heijden, 2004). Some researchers (Ju et al., 2006; Zhang et al.,

2004) have posited that knowledge and learning are instrumental in determining

innovative capabilities at the individual and organisational levels, and such

innovative capabilities can influence organisational stability in dynamic markets (Lee

and Tsai, 2005). The SECI model (Nonaka and Takeuchi, 1995) has been postulated

as converting knowledge resources of into organisation performance, moving

through the four non-linear steps of the SECI model, to synthesise individual

learning into objective and socially shared knowledge across the organisation

(Nonaka et al., 2001).

Resource dependency theorists maintain that directors can provide critical links to

resources that a firm needs to survive and prosper (Pfeffer and Salancik, 1978). At

the same time, the knowledge view of the firm suggests that organisations capable of

acquiring critical operational knowledge faster than competitors, can achieve a

competitive advantage against rivals (Chen and Lin, 2004; Zahra and George, 2002).

Furthermore, by combining the Leader-Member exchange (Dansereau et al., 1975;

Graen and Cashman, 1975) and Job Demand Resource theories (Demerouti, et al.,

2001a: Demerouti, et al., 2001b), a connection can be established between Resource

Dependency theory and organisation performance. Empirical support was recently

found by Liao et al. (2010) demonstrating a statistically significant relationship

between leader-member exchange and employee creativity. It is however assumed

that the presence of distributed leadership would be required for the effects of

executive learning and development to be transmitted through the leader-member

exchange and job demand resource interactions. Thus, as executives gain

"knowledge resources" from L&D, the level of support provided by them to the

employees and the standard of direct reports are enhanced. Through distributed

leadership effects, the job demand resource dynamics available to employees can be

enhanced. As a result of employees gaining increased access to resources through the

distributed leadership/job demand resources/leader-member exchange interactions,

they are likely to respond with increased motivation and experiment with new ideas,

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thereby creating channels of innovative services and products, which can generate

positive organisational performance effects (Nasution, and Mavondo 2008).

Scholars have postulated that a high level of customer satisfaction is likely to attract

customer loyalty and lead to profitability (Jones and Suh, 2000; Bennett, and Rundle-

Thiele, 2004; Keiningham et al., 2003; Yeung et al., 2002), whilst dissatisfied

customers may be inclined to transact with a competitor (Barlow and Mail, 2000).

This has led to the development of knowledge assets in terms of building and

maintaining good quality customer relations to enhance customer lifetime value

(Salomann et al., 2005). Bandy’s (2003) concept of “service synergy model” offers a

theoretical linkage between executive L&D and customer performance. According to

Bandy, executives can influence customer satisfaction in their organisation by

developing a sound understanding of customer needs and preferences. The

acquisition of customer insight requires executives to deploy new skills, which may

entail engaging in some form of L&D. The knowledge gained through the profiling

of customer needs and preference, according to Bandy (2003), can be translated into

service standards which can be communicated and implemented across the

organisation to generate superior products and services.

In addition, executives are also expected to play a significant role in maintaining the

established service standards and will be involved in the whole cycle of acquiring

and translating customer needs into profitable services and products. In effect,

double-loop learning (Argyris and Schon, 1978; Argyris and Schon, 1996) is likely

to occur: as executives interact regularly with customers to gain new insights into

customer preferences, the acquired knowledge can be shared across the organisation

(Mezias and Starbuck, 2003). Eventually, through the double-loop learning process,

the diffusion of the knowledge derived from the executive interaction with customers

is expected to translate into increased customer loyalty (through co-created solutions)

and organisational performance (García-Morales et al., 2009).

Market share is recognised as an important indicator of an organisation’s brand,

product, or service performance in the market place (Terui, 2004). According to

O’Regan (2002), market share is enhanced through the creation of product or service

value. Several researchers (Buzzell and Gale, 1987; Chang and Singh, 2000; Laverty,

2001; Goddard et al., 2005) have suggested that the profitability-market share link is

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achieved through decreased costs, channel power, and consumer loyalty, and

learning effects (Al-wugavan et al., 2008; Besanko et al., 2005; Liu and Yang, 2009).

Thus, the learning effects generated from executive L&D are expected to influence

the market share of organisations.

Furthermore, based on the social exchange and Leader-Member Exchange theories, it

can be argued that effective executive L&D results in increased employee

commitment, in turn leading to employee engagement performance effects. By

engaging in a broad range of L&D processes, it is expected that executives are likely

to enhance their capacity to provide employees with access to a wide range of

resources and support. Employees are expected to place great value on the resources

and support received from executives, and reciprocate through high levels of

commitment (Colquitt et al., 2005) and improved performance (Coyle-Shapiro and

Shore, 2007; Lee, 2008; Tse and Lam, 2008), resulting in positive employee

engagement performance effects. The reverse is likely to hold true if employees

perceive the resources and support from executives as being substandard, and

accordingly, reciprocate with low levels of commitment, leading to low employee

engagement effects.

Several researchers (Audea et al., 2005; Bae and Lawler, 2000; Boselie et al., 2003;

Bjorkman and Xiuheng, 2002; Fey et al., 2001; Faems et al., 2005; Hartog and

Verburg, 2005; Horgan and Muhlau, 2006; Katou and Budhwar, 2006; Snell and

Youndt, 1995; Rodwell and Teo, 2005; Sels et al., 2006; Tessema and Seoters, 2006;

Thang and Quang, 2005; Tzafrir, 2005; Way, 2002; Wright et al., 2003) advancing

the configurational HRM and firm performance approach have highlighted the

significance of training and development dimensions in organisational success.

These researchers argue that training and development are critical components of the

HRM practices associated with generating superior organisational performance.

However, relatively few studies (Fey and Bjorkman, 2001; Hartog and Verburg,

2005; Richard and Johnson, 2001) have incorporated management development

among the bundles of HRM practices in configurational research and have reported

positive outcomes.

Furthermore, some studies in the literature also suggest that the learning capability of

organisational leaders generates non-financial outcomes such as employee

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innovation and efficiency (Hult et al., 2003; Kontoghiorghes et al., 2005; Spicer and

Sadler-Smith, 2006; Wu and Fang, 2010). Another frequently mentioned outcome of

the effects of learning capability is organisational innovation or innovativeness

(Aragon-Correa et al., 2007; Jimenez-Jimenez et al., 2008; Kontoghiorghes et al.,

2005; Lin et al., 2008).

In addition, based on data from 601 European firms, Mabey and Ramirez (2005)

have reported increased productivity to be a consequence of effective deployment of

management development dimensions. Productivity was defined in terms of

objective financial growth measured by the degree of recent/projected change in

sales turnover against the number of managers employed. The above theoretical

considerations and empirical outcomes indicate that such positive effects of

executive learning and development dimensions on organisational outcomes can be

replicated in other settings.

Based on the above discussions, the first hypothesis is proposed as follows: H1:

Executive L&D will generate positive effects on organisational performance.

3.2 Executive L&D Measures

The executive L&D measure was designed on a 7-point Likert interval scale

anchored from “1” = Strongly disagree; “2” = Moderately disagree; “3” = Slightly

disagree; “4” = Neutral; “5” = Slightly agree; “6” = Moderately agree; to “7”

Strongly agree. The purpose of adopting a 7-point Likert interval scale was to offer

respondents a broad choice in capturing the occurrence of executive L&D within

their organisations as well as providing a sound statistical foundation for the

subsequent assessment of the scale’s validity and reliability (Hinkin, 1995; Ogba,

2006; Ogba, 2009).

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3.3 Organisational Performance Measures

As previously discussed within the literature chapter, Venkatraman and Ramanujam

(1986) have argued against the narrow measure of “financial performance”

dominating management literature and called for broad measures of business

performance that encapsulate both financial and non-financial (e.g. innovation,

product quality, market share) indicators, to account for multiple stakeholder goals.

Therefore, drawing on the CVF developed by Quinn and Rohrbaugh (1981, 1983), a

broad measure of organisational performance, encompassing financial and non-

financial indicators is proposed. The central point of the CVF is that organisational

effectiveness is influenced by the organisation’s ability to satisfy multiple

performance criteria, based on four value sets that comprise a combination of two

dimensions: flexibility versus control and internal focus versus external focus.

Accordingly, in this study, multiple organisational performance variables (Chenhall

and Langfield-Smith, 2007), financial, market share, innovation, employee

engagement, and customer service are covered to reflect broader stakeholder goals

and the competing values framework.

Furthermore, a composite measure of organisational performance was utilised in this

research, derived by computing the average of the individual organisational

performance variables. Thus, the composite organisational performance measure

applied in this research comprised of an average of the financial, market share,

innovation, customer satisfaction, innovation, and employee engagement scores,

and this approach is adopted by other scholars (Katou, 2008; Akhtar et al., 2008).

In addition, subjective measures of performance are utilised. To mitigate some of the

limitations associated with subjective measures, the recommendation of previous

researchers reporting single item performance measures (e.g. Katou, 2008; Akhtar et

al., 2008) was adopted by requesting respondents to benchmark their responses

against competitors in their primary industry according to a 5-point ordinal scale

anchored from “1” = lowest 20% to “5” = highest 20%.

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In effect, the organisational performance measures were anchored in the following

order “1” = lowest 20%; “2” = next 20%; “3” = middle 20%; “4” = next 20%; “5” =

top 20%.

3.4 Control Measures

Control variables expected to affect executive L&D and organisational performances

were included within the research model to extend its empirical specification.

Individual, organisational, and environmental factors likely to affect HRM policies

and organisational performance (Delaney and Huselid, 1996) were included in the

analysis, given that the selection of control variables has been found to impact on

research analysis results (Guest, 2001).

Gender: In terms of the individual-level factors, gender was included to evaluate the

bias of male versus female effects on the model. Gender was included as a

dichotomous variable (female = 0; male = 1). Nutt (1993) contends that individuals

can respond differently when confronted with identical decision-making scenarios,

and this phenomenon was expected to manifest across gender types. Empirical

studies within the domain of business and finance have also revealed that women and

men may differ in their preferences and perceptions (Yordanova and Alexandrova-

Boshnakova, 2011). Therefore, the effects gender difference on executive L&D were

expected in this research.

Executive Experience: Executive experience and title were included as control

variables when assessing the variability of competency and seniority in

organisation/career on the relationship between L&D and organisational

performance.

The duration of executive experience has been shown to impact firm strategy and

performance (Carpenter, 2002; Auden et al., 2006). Executive teams with high levels

of experience have been found to deliver better organisational performance than the

executive teams with less-experienced counterparts (Berman, et al., 2002;

Timmerman, 2005).

107

Managerial experience is also considered to be a critical determinant of a firm’s

strategic decision, concerning the use of dynamic capabilities (Ambrosini and

Bowman, 2009; Rodenbach and Brettel, 2012). Such experience is considered

important to strategic HRM because working at the executive level for a sustained

length of time can result in improved coordination of activities, decision-making,

implementation of decisions, and performance (Hitt, et al., 2002; Stewart and

McBraney, 2002).

In the model, executive experience was represented as the natural logarithm of the

number of years with the original data collected as follows (1 = “0–5 years”; 2 = “5–

10 years”; 3 = “10–15 years”; 4 = “15–20”; 5 = “over 20 years”). Title was included

as a nominal measure taking account of the expansive definition of executives in the

Top Echelon literature (Boeker, 1992; Boeker, 1997; Kazanjian and Rao, 1999;

Ferrier, 2001) and spanned across CEOs to other executives (1 = “CEO”; 2 = “Top

level executive”; 3 = “Senior Vice President”; 4 = “Vice President”; 5 = “Director”;

6 = “Divisional Manager”; 7 = “Senior Manager”; 8 = “Middle Manager”).

Firm Size: Firm size was included within the model as an organisational level

control variable to capture the possible size and scale effects. This is because large

organisations are considered to have the capacity to implement more complex

aspects of executive development dimensions than small firms, because of the likely

resource constraints that prevail in the latter (Chandy and Tellis, 2000; Chandy et al.,

2003).

Therefore, the relationships hypothesised in this study was modelled by including

firm size as a control variable that was measured as the logarithm of total employees,

consistent with other studies (Baum and Wally, 2004; Carpenter and Fredrickson,

2001; Baum and Wally, 2004). Prior to logarithmic conversion, the number

employees was captured as a nominal measure (1 = “0–250”; 2 = “250–1000”; 3 =

“1000–5000”; 4 = “5000–10,000”; 5 = “10,000–50,000”; 6 = “50,000–100,000”; 7 =

“over 100,000”).

Firm Age: Firm age was included to determine the effect of organisational maturity

on the analysis. In effect, firm age was included as a proxy for stage of development

and growth, as mature firms are expected to perform better than their younger

108

counterparts (Alam and Deb, 2010). Following the configuration of Hossain and

Hammami (2009), age was considered as the number of years since the foundation of

firms. This variable was measured by calculating the natural logarithm of the number

of years since the foundation of the firm. Prior to logarithmic conversion, the number

of years was captured as a nominal measure (1 = 5–10 years; 2 = 10–20 years; 3 =

20–30 years; 4 = 30–40 years; 5 = over 40 years).

The effects of wide industrial and environmental-level control variables were

assessed by observing firm sector (service and industry) and regional location-

specific effects on the analysis. Sector differences are also expected to influence the

relationship between executive L&D and organisational performance and is

introduced into the model as a dichotomous variable (service = 1; industry = 2).

Firm Sector: Inclusion of sector as a control variable was premised on the notion

that learning orientations are considered to differ across industrial sectors (Lee-Kelly

et al., 2007) and several authors (Hyland et al., 2000; Dymock and McCarthy, 2006;

Khadra and Rawabdeh, 2006) have emphasised on the importance of learning

orientation in the manufacturing sector. Moreover, some researchers (Arundel et al.,

2007; Breschi et al., 2000; Malerba, 2004; Jensen et al., 2007) have focused on the

importance of industry-specific factors to explain patterns of innovation within firms

and the dynamics of industrial structure. The main assumption underlying these

studies is that patterns of innovation of firms are sector-specific, depending on the

very nature of the technological domain. Arundel et al. (2007) compared the work

environment and innovation patterns across 14 European countries and highlighted

how the differences in organisational forms resulted in different innovation

behaviours: leaders, modifiers, and adopters.

Geographic Location: Arundel et al. (2007) report significant differences between

countries (even after controlling for industrial structure) in the way work is organised

and how firms innovate. However, others (Srholec and Verspagen, 2008) argue that

heterogeneity among firms plays a significant role within both sectors and countries.

Srholec and Verspagen (2008) assess the heterogeneity of the innovation processes

and show that while sectors and countries matter, to a certain extent, the large

proportion of variance in terms of innovation strategies is associated with the

heterogeneity within both sectors and countries.

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Furthermore, researchers in the field of HRM have examined individual elements of

performance management within national and multi-national perspectives (Bailey et

al., 1997; Schuler and Rogovsky, 1998; Yu and Zhou, 2003; Fey, 2005; Zhang et al.,

2006) and the results generally suggest the influence of national culture on

organisational performance. Thus, it is expected that regional differences will emerge

in the examination of the relationship between executive L&D and organisational

performance. National and region indicators were summarised and amalgamated

based on sample size, and the effects were measured on a nominal scale as follows;

the UK = 1; USA = 2; Australasia = 3; Europe = 4; Africa & Middle East = 5).

110

Furthermore, based on the foregoing considerations about the theorised effects of

executive L&D on organisational performance, the following research framework is

developed in Figure 3-1 below:

As depicted in Figure 3, the conceptual research model suggests that executive L&D

is expected to generate a positive impact on the composite measures of

organisational performance. In addition to this, the model accounted for control

measures, such as individual characteristics and organisational and environmental

dynamics.

Strategic

Experiential

Participative

Structured

Self-directed

Exe

cuti

ve L

earn

ing

&

Dev

elop

men

t

Network-related

Market Share

Innovation

Customer

Satisfaction

Employee

Engagement

Composite

Organisational

Performance

Controls:

Gender, Executive Experience

Firm Size, Firm Age

Sector; Services & Industry, Geographic Location

Figure 3.1: Conceptual Framework Testing the Effects of Executive L&D on Organisational

Performance Measures, Controlling for Individual, Firm Level, and Environmental Factors.

Firm

Size/Sector

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Executive L&D Effects on Organisational Performance will differ by Industry

Sector (Service and Industry)

It has been suggested by some scholars that learning orientations differ across

industrial sectors (Lee-Kelly et al., 2007). According to Lee and Tsai (2005),

learning orientation is a mechanism that affects a firm’s ability to challenge old

assumptions and facilitate new techniques and methodologies. Baker and Sinkula

(1999) view learning orientation as the combination of mental models (Geus, 1998)

and dominant logics (Bettis and Prahalad, 1995) that are likely to influence a firm’s

learning behaviour.

As discussed in the literature review, several authors (Hyland et al., 2000; Dymock

and McCarthy, 2006; Khadra and Rawabdeh, 2006) have emphasised on the

importance of learning orientation in the manufacturing sector, and particularly,

leadership is considered to be a crucial enabling agent facilitating learning in the

manufacturing sector (Yeo, 2008). Furthermore, Datta et al. (2005) examined how

industry characteristics affect the relative importance and value of HPWP systems

and reported that the impact of human resource systems on productivity is influenced

by industry capital intensity, growth, and differentiation. The results further suggest

that the HPWP effects on labour productivity were pronounced in industries with

low-capital intensity or high-growth rates and that such industries are likely to

include sectors characterised by a combination of high discretionary behaviour and

customer contact, all features of the service sector.

Furthering the debate on the deferential learning orientation across sectors, some

researchers (Taylor and Bain, 2003; Wright and Dwyer, 2003) suggest that industries

dependent on low-cost mass production will tend to have a high propensity towards

establishing administration-oriented HR departments and implement predetermined

systems of control. This highlights the possible viable effects of HR structures across

sectors on the deployment of L&D dimensions.

There are limited studies within the HRM/performance domain, which have either

controlled for or highlighted the differences of learning orientations across sectors

(Kalleberg and Moody, 1994; Chandler and McEvoy, 2000; Comb et al., 2006).

Kalleberg and Moody (1994) examined the sector difference (nonprofit, public, and

112

for-profit establishments) in terms of the application of HPWPs defined in terms of

opportunities for participation in decision making, capacity for participation in team

activities, and provision of incentives for participation. The results indicated that

nonprofit and public organisations were less inclined to deploy performance

incentives (gain sharing and bonuses) and multi-skilling practices than for-profit

organisations, where there was an increased propensity to employ both self-directed

work teams and offline committees. In addition, some single-industry studies (e.g.

Appleyard and Brown, 2001; Batt, 2002) have controlled for intra-industry and

segments-specific idiosyncratic characteristics and have reported a difference in

orientations.

Moreover, some researchers (Lien et al., 2006; Bhatnagar, 2006) consider learning

orientation far more crucial in service firms than in other firms. This outcome is

contrasted by others (e.g. Sadler-Smith et al., 2001). Specifically, Sadler-Smith et al.,

(2001), in their study examining the learning orientations of 300 manufacturing and

service firms suggested that manufacturing firms are more likely to engage in active

learning than service firms. Others (e.g. Jamali et al., 2009) reported non-significant

differences in the learning orientation in service and manufacturing firms. In

conclusion, the above-mentioned studies offer support for the expectation that

statistically significant differences are likely to exist in the learning orientation

between manufacturing and service firms. Consequently, the second hypothesis is

formulated as H2: Executive L&D effects on organisational performance will

differ by sector (service and industry).

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Executive L&D Effects on Organisational Performance will differ by Firm Size

(SME/Non-SME)

According to the Resource-Based View theorists, firms with superior resources are

likely to pursue unique strategies, which are not easily replicable and imitable by

competitors (Barney, 1991; Teece et al., 1997; Teece, 2007; Winter, 2003).

Specifically, differential effects of SHRM dimensions on organisational outcomes

between SME and Non-SME have been observed by some researchers (e.g. Brewster

and Mayne, 1995; Brewster et al., 2006; Collins and Clark, 2003; Datta et al., 2005;

Marginson et al., 1993; Purcell, 1999; Huselid 1995).

According to the Resource Dependency theory, organisational size is correlated with

innovation and performance (Damanpour, 1992), and this relationship is modified by

organisational slack (Bowen, 2002). Bourgeois (1981) postulates that slack relates to

the resources in reserve that permit the adaptation of changes in strategy when

environmental shifts occur. Large organisations are perceived to have more slack and

are therefore expected to cope better with resource scarcity than SMEs. Some of the

resource dependency and slack effects may apply to executive L&D contexts, given

that large firms may have the extra resource capacity to deploy more sophisticated

development approaches when environmental changes occur, than small firms (Mole

et al., 2004). Furthermore, large organisations have the capacity to hold power over

other their supplier-chains and can establish sophisticated learning partnerships to

create differentiated products, thereby obtaining competitive advantage (Raymond

and St-Pierre, 2004; Gardet and Mothe, 2012) over smaller firms.

Overall, there is evidence to support the view that large firms have greater resource

advantages and can execute more complicated HR practices to achieve higher

performance (Collins and Clark, 2003; Datta et al., 2005; Huselid, 1995) than small

firms. It is therefore expected that large firms (i.e. large number of employees) will

have the capacity to translate their resource-advantage into superior performance,

compared to small firms. For instance, Collins and Clark (2003), in their study

involving 73 high-technology firms, examined the relationships between a set of

network-building HR practices –external and internal social networks of top

management teams and organisational performance – controlling for firm size. The

results revealed that the fir size effects of the relationships between the HR practices

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and firm performance (sales growth and stock growth). The effects of firm size on

performance were found to be more favourable to large organisations than to small

firms.

Similarly, Fey and Bjorkman (2001), controlled for firm size in a study examining

the effects of HRM dimensions on organisational performance and the results of their

study suggested that large firms slightly outperformed small firms. In addition,

Brewster et al. (2003), in their study involving a large (n = 2953) and multi-national

sample, concluded that compared to small firms, large firms are able to take

advantage of economies of scale, through the provision of complex HR system, to

generate superior organisational performance outcomes. Based on the above points,

it can be argued that although some small firms may be untangled from bureaucratic

obstacles existing in large organisations, small firms may lack the capacity to reap

the economies of scale associated with a large organisational size. Hence, it seems

likely that firm size could have an inverse effect on the executive L&D; therefore,

the third hypothesis is formulated as follows: H3: Executive L&D effects on

organisational performance will differ by firm size (SME/Non-SME).

115

3.5 Research Design and Strategy

The following section covers the research design, strategy, and methodological

approach adopted for this study.

3.5.1 Positivism versus Interpretivism

The differences between positivist and interpretivist perspectives have been well

articulated by Weber (2004), accounting for a wide range of research parameters.

Firstly, from an ontology (the nature of reality considered by the researcher [Blaikie,

1993]) perspective, positivists consider the researcher and reality to be separate

entities, whilst the interpretivists view the researcher and reality as inseparable

entities. Secondly, the research object (phenomena being studied) is formulated by

interpretivists on the basis of meanings structured by the lived experience of the

researcher (Hatch and Cunliffe, 2006), whereas the positivists postulate that the

object of research has inherent qualities existing independently of the researcher

(Eriksson and Kovalainen, 2008). Thirdly, from a research methods’ perspective,

positivists tend to apply a variety of methods such as laboratory experiments, field

experiments, and surveys, gathering large amounts of data and normally employ

statistics and content analysis to detect underlying regularities (Saunders, Lewis and

Thornhill, 2007; Hatch and Cunliffe, 2006). On the other hand, interpretivists tend to

implement qualitative approaches, especially case studies and ethnographic,

phenomenographic, and ethno-methodological studies, relying on hermeneutics and

phenomenological approaches to decipher indirect meanings in order to reflect any

underlying factors and conceptualisations. Fourthly, from the epistemology

(knowledge or theory of knowledge) point of view, positivists assume that objective

reality exists beyond the human mind, in contrast with the interpretivist’s view that

knowledge of the world is intentionally constructed through experiences or social

construction of the world. In terms of validity (of measures and validity of the

measurement process), interpretivists tend to be concerned about claims that the

knowledge acquired via the research should be logically defensible; thus, according

to this view, evidence presented should be examinable, and the research context and

any associated claims derived thereby should be reasonably acceptable to a wider

audience. Conversely, for the positivists, validity involves collecting data, which

truly represent measures of reality, and involves the deployment of methodologies

116

articulating different types of checks:. construct validity, internal and external

validity, and statistical conclusion of validity.

Finally, in terms of reliability (research outcomes or the research conduct), the

positivist’s view is that reliable results should be replicable by other researchers,

whereas the interpretivist’s consideration is that reliability should be directed

towards demonstrating interpretive awareness. In conclusion, Weber (2004)

challenges the differences between the positivist and interpretivist views and

suggests that the dissimilarities mainly lie in the choice of methods. Furthermore,

Weber (2004) recommends that researchers should adopt the positivist approach

when employing methods that involve experiments, surveys, and field studies,

whereas interpretivist researchers are advised to implement methods associated with

case, ethnographic, phenomenographic, and ethno-methodological studies.

3.5.2 Inductive versus Deductive

Generally, the deductive and inductive approaches have been considered broad and

separate forms of reasoning. Compared to the inductive approach, deductive

reasoning is considered to have a narrow focus, concerned with testing or confirming

hypotheses. According to Sekaran (2003), the implementation of the deduction

process involves a number of steps. Firstly, theories and hypothesis are generated on

the basis of personal experiences. Literature search or ideas are then amalgamated

from another research with the view of generating solutions to existing problems.

Secondly, the generated theories and hypotheses are then operationalised into

concepts, allowing measurement through empirical observations. Next, steps are

taken to identify alternative techniques to measure the operationalised concepts, and

this includes the selection and design of the appropriate research methodologies.

Finally, the falsification and discarding step is implemented, where the selected

theories and hypotheses are either falsified or confirmed (Lancaster, 2005). In sum,

deduction embodies a process of drawing conclusions based on logically analysed

inferences. Conversely, inductive reasoning is considered more open-ended than

deductive reasoning and expects researchers to establish a general proposition based

on observed phenomena in a logical manner (Sekaran, 2003). Hence, the inductive

process follows a sequence of steps opposite to the deductive approach, moving from

specific observations to broader generalisations and theoretical conceptualisations.

117

Accordingly, in studies adopting the inductive approach, researchers commence with

specific observations and measures, detect patterns and regularities, and formulate

tentative hypotheses, before establishing general conclusions. Notwithstanding, the

above cited differences, Teddlie and Tashakkori (2003) present a pluralistic view

indicating that in practice, most research processes reflect an overlap of both the

deduction and induction approaches, as the former can assist in the shaping of

arguments whilst the latter can support the consolidation of the argumentation

processes. Thus, the two forms of reasoning can be complimentary in practice.

3.5.3 Research Design

Research design provides a framework for the collection and analysis of data,

reflecting decisions about the priority given to a range of factors within the research

process (Bryman and Bell, 2007). Furthermore, De Vaus (2001) postulates that

effective research design enables the generation of unambiguous evidence to validate

the research questions under investigation. According to Sekaran (2003), research

design encompasses a range of rational decision-making choices regarding the

purpose of a study (exploratory, descriptive, hypothesis testing), its location (i.e., the

study setting), the type of investigation, the extent of researcher interference, time

horizon, and the level to which the data will be analysed (unit of analysis).

Other considerations of research design extend to decisions regarding the sampling

design, data collecting approaches, and procedures for measuring, analysing, testing

the hypotheses generated from the research. Bryman and Bell (2007) support the

view by Sekaran (2003), in that the research methods form part of the design process.

Consequently, in line with Sekaran’s definition of research design, this study will test

a number of hypotheses derived from the conceptual framework, at a later stage of

this chapter. It is believed that studies employing hypothesis testing tend to explain

the nature of certain relationships, establish the differences among groups, or

establish the independence of two or more factors in a situation. In effect, hypothesis

testing offers an enhanced understanding of the relationships that exists among

variables.

118

Moreover, in this study, the ordinal regression analysis is implemented to delineate

the effects of executive L&D on organisational performance. The study’s horizon

aligns with the cross-sectional approach where data is gathered once over a period of

time such as days, weeks, or months in order to answer a research question.

Conversely, when data is collected at more than one point in time, the study is

considered longitudinal (Creswell, 2003). Longitudinal studies according to De Vaus

(2001) are amenable to situations seeking to identify the patterns and direction of

change and stability. Therefore, longitudinal approaches can be employed to

establish temporal order of events, developmental effects, and historical effects. In

sum, this study follows the cross-sectional survey approach where data is collected at

one point to determine relationships between variables at the time of the study.

3.5.4 Research Approach

Research approach refers to the pattern of assumptions, ideas, and techniques that

characterise quantitative and qualitative researchers (Bryman and Bell, 2007). Whilst

quantitative and qualitative research approaches are distinctive, they also have

similarities and overlap in certain respects and can be combined in various ways.

Researchers choose one of these two approaches or use a combination, depending on

the definition of the problem and the nature of the information being sought (Punch,

1998). The approach adopted in this study is the quantitative technique following

deductive reasoning with a positivism perspective. Creswell (1994) sums up the

quantitative approach as an inquiry into a social or human problem, based on theory

testing composed of variables, measured with numbers, and analysed with statistical

procedures, in order to determine whether the predictive generalisations of the theory

hold true. Generally, quantitative research is considered to be more formalised and

structured than qualitative research.

3.5.5 Research Strategy

Initially, the research strategy was to collect the primary data from HRM directors

from FTSE 350 companies in the UK. Surveys were distributed to respondents by

post and email, but the response rate was extremely low (5%). Consequently,

because of the outcome of the initial survey, a convenient survey strategy, which

extended to executives across a wider geographic location (including the UK), was

119

adopted. Generally, survey administration to single respondents has attracted some

critique (see Bowman and Ambrosini, 1997).

Similarly, some authors suggest that the multiple respondent approach is not without

challenges, such as low usable response rates and high complexities in the survey

administration process (Malhotra, 1993). Furthermore, there is evidence, suggesting

that the convenience-sampling technique is gaining popularity within the HRD

literature, and provides a reasonable justification for applying this approach in this

research. According to Dooley and Lindner (2003), 51% of 158 articles appearing in

the HRD Quarterly from 1990 to 1999 applied some form of sampling strategy. The

breakdown of the data reveals further that 37% used convenient sampling; 31%,

purposive sampling; 17%, random sampling; and the remaining 6%, a combination

of cluster and stratified sampling approaches.

3.6 Samples Description and Data Collection Procedures

As noted above, convenience sampling of a wide spectrum of executives and

organisational leaders (senior to mid-level) in private organisations provided data for

the study elicited from different sectors (service and industry) and across a wide

geographical area: USA, Canada, the UK, Western and Eastern Europe, Africa,

Middle East, and Asia. Accordingly, the heterogeneous nature of the sample offers

some advantages in terms of the generalisability of the findings over working

environments.

In implementing the data collection process, the executive L&D instrument was

mailed to diverse executives groups on the LinkedIn professional networking

website: CEOs, chief learning officers, chief finance officers, HR executives and

other senior management. In addition, the instrument was distributed via email to

executive respondents. This approach was cost-effective and allowed the instrument

to be validated across a multinational audience, offering a unique means of validating

the executive L&D instrument and eliminated the possible bias resulting from

collecting the data from single or few selected organisations. The data was collected

in two main phases with phase one providing information for initial scale validation

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and phase two enabling further confirmatory validation as well as the examination of

the performance effects of the validated scale.

At distribution, three points were stressed: (1) participation was entirely voluntary;

(2) executive L&D at the business, divisional, or SBU units was the focus of the

study and ideal respondents were thus members of a firm/business unit/division

familiar with the executive L&D dimensions utilised by their firm/business

unit/division; and (3) the answer to each question should best describe the practices

or situation in the respondent’s firm/business unit/division. Additional data were

elicited to control for gender, firm age and size, respondent executive level

experience, respondent country of residence/location of business, and respondent

managerial level according to business title.

Whilst solutions produced by large samples are generally expected to produce

solutions that are more reliable than those produced by small samples, the sample

size decision may be formulated in line with a set of factors related to the model

complexity, expected rate of missing data, and estimation procedures used (Hair et

al. 2006). For this study, the minimum size target of 100 usable responses per phase

was set, considering the model complexity and the guidelines specified by Harris and

Schaubroeck (1990), applicable to multiple group analysis.

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3.7 Sample Description and Demographics

Table 3.1 presents the demographic detail of respondents in sample 1, reflecting

executives from different levels: CEO (23), Top Level Executive (23), Senior Vice

president (12), Vice President (12), and Director (40). The questionnaire deployed

for this phase of the research can be found in Appendix B.

Table 3.1: Demographics of Sample 1 (Data Collected: December 2009 - March

2010).

Sample 1 demographics

(N = 150)

N

Marginal

Percentage

CEO 17 11.3%

Top Level Executive 19 12.7%

Senior Vice President 27 18.0%

Vice President 33 22.0%

Title

Director 54 36.0%

Male 90 60.0% Gender

Female 60 40.0%

0–5 years 65 43.3%

5–10 years 47 31.3%

10–15 years 22 14.7%

20–25 years 9 6.0%

Exec Experience

with the firm

Over 25 years 7 4.7%

SME 51 34.0% Firm Size

Non-SME 99 66.0%

Industry 55 36.7% Sector

Services 95 63.3%

The UK 47 31.3%

USA 33 22.0%

Australasia 25 16.7%

Region

The EU 29 19.3%

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Sample 1 demographics

(N = 150)

N Marginal

Percentage

Africa 16 10.7%

Total 150 100%

In terms of the geographic spread of firms, the sample 1 covered a wide geographic

area (Table 3.1).

Table 3.2 presents the demographic detail of respondents in sample 2, and reflects

the distributed leadership view, presented in section 2.1 of the literature review. See

Appendix C for the questionnaire deployed for this phase of the research.

Table 3.2: Demographics of Sample 2 (Data Collected: April–November 2011).

Sample 2 demographics (N =

222)

N

Marginal

Percentage

CEO 23 10.4%

Top Level Executive 23 10.4%

Senior Vice President 12 5.4%

Vice President 12 5.4%

Director 40 18.0%

Divisional Manager 16 7.2%

Senior Management 40 18.0%

Title

Middle Management 56 25.2%

Male 136 61.3% Gender

Female 86 38.7%

0–5 years 80 36.0%

5–10 years 64 28.8%

10–15 years 46 20.7%

Exec Experience

with the firm

20–25 years 17 7.7%

123

Over 25 years 15 6.8%

SME 68 30.6% Firm Size

Non-SME 154 69.4%

Industry 73 32.9% Sector

Services 149 67.1%

The UK 45 20.3%

USA 60 27.0%

Australasia 32 14.4%

The EU 42 18.9%

Region

Africa 43 19.4%

Total 222 100%

In terms of location, the sampled firms spanned a wide geographic area, with USA

(60) and the UK (45) contributing the most.

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3.8 Quantitative Data Analysis Procedures

Following the brief description of background information of participants and the

development of the research framework in section 3.1, the data analysis has been

conducted systematically as depicted in Figure 3.2.

Step One: Measurement Model Development and Validation

Organisational Performance

(1) Reliability of the composite

measure of organisational

performance by observing the

Cronbach's α, inter-item correlation,

and item-total correlation

Executive L&D

(1) Exploratory factor analysis to extract latent variables

(i.e. factors) from first-half set data

(2) Confirmatory factor analysis to verify and confirm

one-factor and four-factor measurement models with an

acceptable fit to data (for phase 1 and 2 data)

(3) Discriminant and convergence validity assessment, to

confirm the composite reliability and variance extracted

Step 2: Common Methods Variance Test

Harman’s one-factor test and confirmatory factor analysis, post

hoc statistical tests involving:

(1) Unrotated principal axis analysis to reveal the presence of

distinct factors and observation of Eigen values

(2) Confirmatory factor analysis to confirm that the single-

factor model does not fit the data well

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H3: Executive L&D -----OP – modified by firm

size

Step1: Split data by firm size (SME vs. Non-

SME) and separate ordinal regression analysis

conducted to evaluate the effects of the

individual-level control variables (gender, title,

and executive experience) on organisational

performance

Step2: Evaluate the effects of the firm-specific

control variables (age) on organisational

performance

Step3: Evaluate the effects of the environment

(region) on organisational performance

Step4: Evaluate the effects of the executive

L&D measure on the organisational

performance variables and observing the

changes in the chi-square and the pseudo R-

square; confirm or disconfirm H3

H2: Executive L&D -----OP – modified by sector

Step1: Split data by firm size (service vs.

industry) and separate ordinal regression analysis

conducted to evaluate the effects of the

individual-level control variables (gender, title,

and executive experience) on organisational

performance

Step2: Evaluate the effects of the firm-specific

control variables (age and size) on organisational

performance

Step3: Evaluate the effects of the environmental

(regional) on organisational performance

Step4: Evaluate the effects of the executive L&D

measure on the organisational performance

variables, observing the changes in the chi-square

and the pseudo R-square changes; confirm or

disconfirm H2

Step 3: Ordinal Regression Model Evaluation and Hypotheses Test

H1: Executive L&D -----OP

Step1: Ordinal regression analysis models to evaluate the effects of the individual-

level control variables (gender, title, and executive experience) on organisational

performance

Step2: Evaluate the effects of the firm-specific control variables (age and size) on

organisational performance

Step3: Evaluate the effects of the environmental (regional and industry) on

organisational performance

Step4: Evaluate the effects of the executive L & D measure on the organisational

performance variables, observing the changes in the chi-square and the pseudo R-

square changes; confirm or disconfirm H1

Figure 3.2: Summary of Quantitative Data Analysis Procedures.

126

Data Analysis Part 1 – Instrument Development

3.9 Instrument Development: Executive L&D Measure

The executive development measure used in this study was formulated on the basis

of two main parameters. First, consideration was given to the third stage of Louma’s

(2005) management development model, discussed in section 2.7 of the literature

review chapter. Thus, items were included in the measure taking account of the

integrative stage of Louma’s Model (accounting for both individuals and the

organisation requirement). Second, consideration was given to the six learning and

development dimensions (structured, participative, network-related, self-directed,

experiential, and strategic learning) discussed in section 2.7 of the literature review

chapter. As indicated previously, this approach reflects a broad and holistic

conceptualisation of executive L&D. The measure is also derived from a

comprehensive review of the SHRM, executive and management development,

human capital, top echelon, and strategic management literature.

The design of the measure also reflects a broad spectrum of learning dimensions

(both formal and informal). This was considered a pragmatic representation of the

executive work scope, which tends to involve directing the activities of the

organisation, including making and implementing strategic and operational decisions

effectively, in order to create economic rents which cannot be replicated by

competitors (Castanas and Helfa, 1991). This approach also addresses some of the

perceived weaknesses in traditional training and development measures (Appleyard

and Brown, 2001; Wright et al., 2003; Guest et al., 2003; Horgan and Muhlau, 2006;

Way, 2002).

Specification of the items was undertaken by interrogating an extensive range of

existing measures and theoretical conceptualisations relevant to executive L&D

across the executive SHRM, organisational learning, management development,

leadership development, and executive coaching literature. The items were designed,

modified, and specified on the basis of existing measures developed by a wide range

of authors (Boyles, 2007; Clarke, 2005; Chiva et al., 2007; Johnson, 2007; Lin and

Shih, 2008; Miller et al., 2007; Paisey et al., 2007; Rickards et al., 2001; Spicer and

Sadler-Smith, 2006; Thompson and Cole, 1999). Table 7 presents the items included

127

in the initial executive L&D measure. Items aligning to the six main categories of

executive L&D (structured, participative, network-related, self-directed, experiential,

and strategic) were selected with any overlapping items eliminated. Refer to

Appendix D for a summary of the original and revised items.

Two experiential executive L&D items were included from the Chiva et al’s. (2007)

study to assess the level of internal support executives received from peers in terms

of taking risky decisions and experimenting with new ideas in order to drive

innovation, efficiency, and cost reduction; these were slightly reworded and included

under the experiential dimensions of this measure. Chiva et al.’s study was based on

data obtained from 157 employees in 8 manufacturing firms in Spain from which

Chiva et al. (2007) constructed and validated a 14-item organisational learning

capability scale, encompassing 5 main dimensions: experimentation, risk taking,

interaction with the external environment, dialogue, and participative decision

making. The remaining items in Chiva et al.’s measure were excluded because they

fell outside the scope of this study.

A number of items were included from Lin and Shih’s (2008) measure of executive

strategic human resources management (ESHRM). Out of the 22 items specified in

the measure of ESHRM, two items associated with training were selected, modified,

and included as structured and participative L&D measures. Another item was

included to measure structured L&D related to the provision of communication and

problem-solving training to the TMTs. An item was included to assess participative

L&D associated with evaluating organisational proclivity of establishing cross-

organisational platforms that engender increased understanding of functional process

and governance arrangements. Another item was modified and included as an

experiential L&D measure related to the propensity at which organisations allowed

executives to engage in stretch assignments. Likewise, two items related to

developing team climate were included as measures of networking and participative

L&D, and both items were originally defined as team climate measures within Lin

and Shih’s study. One additional item was included as a measure of networking L&D

from Lin and Shih’s measure of ESHRM, assessing the effects of top team

integration on organisational competitiveness. This original item assessed the

frequency of planned organisational dimensions particularly geared towards

stimulating informal relations in order to drive information sharing behaviour among

128

executives. Items related to selection, compensation, and performance appraisal in

the original Lin and Shih construct were excluded from the current measure, as they

were outside the scope of the current study.

Three items in the experiential L&D measure were included from the validated

measure of organisational learning orientation developed by Spicer and Sadler

(2006). This study was based on data collected from 82 owner-managers, comprising

a nine-item measure with Cronbach’s α above 0.7, and the three selected items are

associated with organisational limits related to experimentation, risk-taking, and

flexibility in the pursuit of superior cost and process efficiencies. To maintain

consistency in the phraseology adopted across the new measure, these items were

reworded to focus specifically on executives instead of the general assessment of

organisational learning orientation.

One new experiential L&D measure was created by merging three items associated

with a factor labelled as learning from experience from a six-factor scale, measuring

leadership and team performance, developed by Rickards et al. (2001). The original

measure was constructed from the responses obtained from convenience sampling of

1103 respondents involved in training and action research programmes. In the

original measure, these three items addressed learning from mistakes, propensity to

engage in open communications after mistakes had occurred, and the inclination of

employees to try new initiatives after failing in others.

An item was included to measure networking L&D to assess the degree to which

executives reviewed and elicited feedback from peers on key decisions at the inter-

organisational level, and this was taken from Clarke’s (2005) study on workplace

learning environments. Items related to empowerment and communication, support

for learning transfer, and support for reflection and job challenge were excluded from

the questionnaire partly because they either overlapped with other items already

specified elsewhere in the instrument or were unrelated to the focus of this research.

All the items associated with strategic L&D were obtained from Thompson and

Cole’s (1999) study of 32 strategic competencies categorised under 8 sub-clusters

(strategic awareness and control, strategy implementation, stakeholder satisfaction,

failure and crisis avoidance, ethics and social responsibility, quality and customer

129

care, functional competencies, and competitive strategy), originally deemed crucial

for driving strategic excellence and competitive success. According to many authors

(Castanias and Helfat, 2001; Day and Halpin, 2004; Lord and Hall, 2005), the

mastery of competitive values, effective resource deployment, and superior

understanding of business environmental shifts are considered the constituents of

effective strategising, triggering a double-loop strategic learning within organisations

seeking to outperform their competitors. Until now, the items developed by

Thompson and Cole (1999) had not been empirically tested, although the authors

mapped the measure against progressive and declining companies to demonstrate

which items were aligned to each stage of organisational development.

However, as these results were derived from a qualitative approach, it is essential to

conduct an empirical verification of these items. Specifically, the items tested in

Thompson and Cole’s study encompassed L&D derived from the following:

strategising taking into account a range of considerations; ethical, holistic, current,

long-term implications; maintaining awareness of changes in the business

environment; maintaining close links with customers in order to create differentiated

products/services; embedding new initiatives taking account of inter-functional and

cross-organisational impact; and reacting to situations and events before they

escalate to critical difficulties for the organisation. All six items were retained as

measures of strategic L&D.

Two new items were introduced under self-directed learning, on the basis of Miller et

al’s. (2007) ideas, supported by other scholars (e.g. Sutaari and Vitala, 2008). One of

the items assessed the tendency of executives to refer to various sources of

information such as books and professional magazines in order to enhance their L&D

(Miller et al., 2007). It is expected that by building this capacity of engaging multiple

sources of information, executives will enhance their problem-solving capabilities

(Louma, 2005; Gray and Mabey, 2005). The second item evaluated the degree to

which organisations provided opportunities for executives to engage in self-initiated

learning to enhance their capabilities (Miller et al., 2007). Such dimensions were

expected to augment the other practical and interactive forms of learning that

executives are likely to engage in.

130

In terms of participative L&D, an item was included to capture executive learning

and development derived from engaging in frequent interactive activities such as

conference calls, join problem-solving initiatives, joint progress reviews of special

projects, inter-functional working groups, etc. (Miller et al., 2007). The second item

related to participative L&D was aimed at examining the frequency of well-planned

away days, which can serve as a forum where executives can generate innovative

ideas and solve specific organisational problems (Johnson, 2007).

An items list was generated on the basis of the theorised view that executives can

improve their capabilities through coaching dimensions. Bowles et al. (2007)

demonstrated that over a 12-month period, executives that were offered performance-

based coaching specifically worked at improving recruitment, leadership, coaching,

and achievement of self-goals, measured in terms of achieving recruitment targets.

Although the authors caution against generalising the results of the study owing to

sample size (N = 59), it remains one of the few recent empirical studies offering a

direct assessment of coaching and productivity. Table 7 presents the pre-factor

analysis items included in the executive L&D measure.

Table 3.3: Pre-Factor Analysis Items included in the Executive L&D Measure.

Executive L&D Measure

Experiential L&D

1. Executives are encouraged to take risks, venture into unknown territories, and

experiment with new ideas to drive efficiency in processes and cost reduction

(Spicer and Sadler-Smith, 2006).

2. Executives are encouraged to experiment with new and novel approaches to

resolve organisational problems (Spicer and Sadler-Smith, 2006).

3. Executives are encouraged to amend established organisational practices in

pursuit of efficiency and effectiveness (Spicer and Sadler-Smith, 2006).

4. Executives in learn quickly from past experiences, thus permitting growth,

change, adaptation, and creative problem-solving (Lin and Shin, 2008).

5. Executives are given the opportunity to participate in cross-functional activities

and stretch assignments such as organisational restructuring, strategic initiatives,

merger integrations, acquisitions targeting, etc., to broaden their job scope and

competencies (Chiva, 2007).

6. Executives receive support and encouragement from other peers when

131

presenting new ideas and initiatives (Chiva, 2007).

Structured L&D

1. Executives are offered suitable communication and problem-solving training

and development opportunities (Lin and Shin, 2008).

2. The organisation is highly supportive of executives’ attendance at professional

society seminars, conferences, and programmes to enhance their skills and

capabilities (Paisey et al., 2007).

3. The organisation offers strong support (financial and non-financial) to

executives when they pursue non-work related studies (Paisey et al., 2007).

4. Executives are offered coaching support to enhance their personal effectiveness

and leadership skills to facilitate the achievement of organisational goals and

targets (Boyles, 2007).

Participative L&D

1. Executives frequently engage in interactive activities such as conference calls,

joint-problem solving initiatives, joint-progress reviews of special projects, inter-

functional working groups, etc. (Miller et al., 2007).

2. Executives engage in regular "away day" programmes, which serve as a forum

for creating strategic ideas, generating solutions for specific organisational

problems, and developing interpersonal capabilities (Johnson, 2007).

3. The organisation organises regular briefings and activities to help executives

understand cross-organisational operational processes and governance structures

(Lin and Shin, 2008).

Networking-related L&D

1. Executives are good at networking with key individuals outside the organisation

and can exchange ideas for mutual benefit (Rickards et al., 2001).

2. The organisation frequently promotes informal social activities for executives to

stimulate internal networking which helps them to forge informal relations (Lin

and Shin, 2008).

3. Executives are encouraged to interact with a wider stakeholder group:

competitors, customers, suppliers, universities, seeking to acquire and disseminate

good practice across the organisation (Chiva, 2007).

4. Executives have the propensity of reviewing key decisions and ideas with peers

to gain buy-in, support, and feedback (Clarke, 2005).

Self-directed L&D

1. Executives in our organisations tend to consult various sources of information

132

such as specialist books, industry and professional association magazines,

academic articles, etc. to enhance their L&D (Miller et al., 2007).

2. Executives are offered opportunities to develop new skills and competencies via

bespoke flexible learning arrangement (including distant learning options)

delivered in partnership with external providers (Miller et al., 2007).

3. The organisation provides a wide range of web-based learning resources (work

and non-work related) aligned to the development needs of executives (Paisey et

al., 2007; Miller et al., 2007).

Strategic L&D

1. Executives strategise taking into account ethical, holistic, current, and future

implications on the business (Thompson and Cole, 1999).

2. Executives maintain an awareness of business environment changes and their

implications on the organisation (Thompson and Cole, 1999).

3. Executives maintain close links with customers in order to understand, attract,

and satisfy them more effectively than competitors often resulting in the creation

of differentiated, high added-value products and services (Thompson and Cole,

1999).

4. Executives embed new initiatives and changes in the organisation by taking into

account inter-functional and cross-organisational influences and effects

(Thompson and Cole, 1999).

5. Executives tend to react rapidly to situations or events before they escalate to

critical financial, competitive, or leadership difficulties for the organisation

(Thompson and Cole, 1999).

The final version of the instrument incorporated comments from the pilot phase and

was implemented during phase one of the data collection process, as depicted in

Table 3.3. The instrument is split into 6 main sections, consisting of 25 item

measures of executive L&D.

133

3.9.1 Pre-Testing of the Executive L&D Measure

Pilot testing of the initial executive L&D instrument was undertaken with a group of

15 senior managers (8 men and 7 women), with 5–10 years of executive-level

experience in both private (85%) and public sector (15%) organisations. The senior

managers included in the pilot were selected on the basis of seniority and background

knowledge and experience in the field of SHRM and executive development. The

instrument was distributed by email to respondents, requesting comments about the

suitability of the questions as a measure of executive L&D, overall length of the

questionnaire, and suggestions in terms of formulating the questions to suit executive

managers. Feedback received from the pilot phase was very positive, and some

minor revisions were applied to the questionnaire.

For instance, the item “Executives are given the opportunity to participate in cross-

functional activities and stretch assignments such as organisational restructuring,

strategic initiatives, merger integrations, acquisitions targeting, etc., to broaden their

job scope and competencies” (Chiva, 2007) was originally presented as follows:

“Opportunities are provided for executives to participate in cross-functional activities

and stretch assignments such as organisational restructuring, strategic initiatives,

merger integrations, acquisitions targeting, etc., to broaden their job scope and

competencies”. The rewording offered clarity and rendered it consistent with the

other items. After the pilot stage, the items were subsequently reviewed by two

executive development experts (one each from the public and private sectors) to

establish content validity prior to the implementation of phase one of the data

collection process.

3.9.2 Exploratory Factor Analysis

Exploratory factor analysis (EFA) is a statistical technique used to determine the

structure of factors required for establishing dimensionality relationships between the

specific items and construct under design (Pallant, 2001; Tabachniel and Fidell,

2001). The justification for the application of EFA in this study was based on the

measure of sampling adequacy, the Bartlett’s test of sphericity (Bartlett’s Test), a

statistical test to quantify the degree of inter-correlations among the variables, and

the Kaiser-Meyer-Olkin (KMO) index (Hair et al., 1998).

134

Following the recommendations of Pallant, (2001), the Bartlett’s Test is deemed to

be significant (p < 0.05) for the factor analysis to be considered appropriate and the

sampling adequacy measure (based on the KMO index ranging from 0 to 1) values

above 0.60 are considered appropriate for exploratory factor analysis. Furthermore,

the strength of the relationship between the item and the latent construct as indicated

by the factor loading is used to ascertain the convergent and discriminant validity of

the scales (Hair et al., 2006), and items with loadings higher than 0.50 as postulated

by Nunnally (1978) are retained for further analysis.

For detailed analysis of the associations between the various components of

executive L&D, phase reduction processes were implemented. Statistical factor

analysis provided a basis for ascertaining whether the assembled measures were

related to the various components of executive L&D contained in this research.

A factor is a linearly observed variable, representing a specific underlying dimension

of a construct, distinct from other items (Tabachniel and Fidell, 2001). In effect,

factor analysis helps to derive a parsimonious or reduced set of factors that

summarise and describe the structural interrelationships among the items within a

construct in a concise manner (Gorsuch, 1983). Interpretation and evaluation of data

related to factor analysis is not without controversies and debate.

This debate involves issues ranging from the adequacy of items required for factorial

analysis and pros and cons of oblique and orthogonal solutions to issues surrounding

the accurate interpretation of the factor solutions. In terms of rotational methodology,

Child (2006) argues that although orthogonal solutions are easy to interpret, they can

often produce misleading solutions at instances where the factors tend to

intercorrelate, specifically when the instrument is composed of several interrelated

dimensions. Child (2006) suggests that in most cases, oblique solutions should be

preferred because they offer a far more realistic representation of how the factors

should inter-correlate than orthogonal solutions.

To test the validity of this hypothesis, both varimax and oblimin rotational methods

were employed to ascertain if any significant variances could be identified in the

results from each rotational methodology. Factor loadings greater than 0.4 are often

135

considered to be salient, indicating that it is meaningfully related to a primary or

secondary factor (Brown, 2006).

Some good practices for interpreting the factors and evaluating the quality of the

solution is offered by Child (2006), involving the elimination of items reflecting the

characteristics of poorly defined items such as factors on which only 2 or 3 items

have salient loadings; this depicts low factor determinacy (poor correspondence

between the factors and their factor scores). It is also recommended to eliminate

poorly behaving items such as items with high loadings on more than one factor (i.e.

cross loadings). Finally, items with small loadings on all factors (i.e. low

communalities) are also candidates for elimination during factor analysis. However,

Pett et al. (2003) suggest that the interpretation of factors must be balanced by

considering the theoretical and empirical framework of the construct, implying that

at some instances, even where some items do not behave in accordance with the

expected parameters, they can be retained in the construct.

3.9.3 Results of Exploratory Factor Analysis Results

To uncover the underlying structure of the set of items included in the apriori scale,

EFA was performed on the data and the results are reported in Table 3.4. To aid

interpretability and clarity of the items in the tables, the six pre-exploratory factor

components of executive L&D were allocated the following labels: strategic = StraT,

experiential = ExpE, self-directed = SelfD, participative = ParT, networking-related

= NetW, structured = StruC. Examination of the information presented in Table 8

indicates that the Cronbach’s α exceed 0.90 across the construct.

136

Table 3.4: Results of Reliability Analysis.

Items Scale

Mean if

Item is

Deleted

Scale

Variance

if Item is

Deleted

Corrected

Item-

Total

Correlatio

n

Cronbach

's α if

Item is

Deleted

Executives are encouraged to take risks,

venture into unknown territories and

experiment with new ideas to drive

efficiencies in processes and cost

reduction. ExpE1

104.71 881.497 .600 .948

Executives are encouraged to experiment

with novel approaches to resolving

organisational problems. ExpE2

104.63 882.074 .618 .948

Executives are encouraged to amend

established organisational practices in

pursuit of greater efficiency and

effectiveness. ExpE3

104.45 885.739 .571 .948

Executives in the organisation learn

quickly from past experiences, thus

permitting growth, change, adaptation, and

creative problem solving. ExpE4

105.23 874.539 .691 .947

Executives are given the opportunity to

participate in cross-functional activities

and stretch assignments such as

organisational restructuring, strategic

initiatives, merger integrations,

acquisitions targeting, etc., to broaden their

job scope and competencies. ExpE5

105.03 875.328 .634 .947

Executives receive support and

encouragement from other peers when

presenting new ideas and initiatives.

ExpE6

104.87 878.962 .719 .946

137

Items Scale Scale Corrected Cronbach

Mean if

Item is

Deleted

Variance

if Item is

Deleted

Item- 's α if

Total Item is

Correlatio Deleted

n

Executives are offered suitable

communication and problem-solving

training and development opportunities.

StruC1

105.04 869.904 .675 .947

The organisation is highly supportive of

executive attendance at professional

society seminars, conferences, and

programmes to enhance their skills and

capabilities. StruC2

104.85 872.426 .661 .947

The organisation offers strong support

(financial and non-financial) to executives

when they pursue non-work related studies.

StruC3

105.83 883.791 .552 .948

Executives are offered coaching support to

enhance their personal effectiveness and

leadership skills to facilitate the

achievement of organisational goals and

targets. StruC4

105.18 860.444 .742 .946

Executives are good at networking with

key individuals outside the organisation

and can exchange ideas for mutual benefit.

NetW1

104.21 905.682 .492 .949

The organisation frequently promotes

informal social activities for executives to

stimulate internal networking, which helps

them to forge informal relations. NetW2

105.38 876.103 .668 .947

138

Items Scale Scale Corrected Cronbach

Mean if

Item is

Deleted

Variance

if Item is

Deleted

Item- 's α if

Total Item is

Correlatio Deleted

n

Executives are encouraged to interact with

a wide stakeholder group: competitors,

customers, suppliers, universities, in a bid

to acquire and disseminate good practice

across the organisation. NetW3

104.83 874.596 .709 .947

Executives have the propensity to review

key decisions and ideas with peers to gain

buy-in, support, and feedback. NetW4

104.71 884.005 .650 .947

Executives engage in frequently interactive

activities such as conference calls, joint

problem-solving initiatives, joint progress-

reviews of special projects, inter-functional

working groups, etc. ParT1

104.48 883.070 .615 .948

Executives engage in regular "away day"

programmes, which serve as a forum for

creating strategic ideas, generating

solutions for specific organisational

problems and developing interpersonal

capabilities. ParT2

105.35 872.203 .658 .947

The organisation organises regular

briefings and activities to help executives

understand cross-organisational operational

processes and governance structures.

ParT3

105.19 868.157 .726 .946

139

Items Scale Scale Corrected Cronbach

Mean if

Item is

Deleted

Variance

if Item is

Deleted

Item- 's α if

Total Item is

Correlatio Deleted

n

Executives in tend to consult various

sources of information such as specialist

books, industry and professional

association magazines, academic articles,

etc., to enhance their learning and

development. SelfD1

104.52 885.204 .603 .948

Executives are offered opportunities to

develop new skills and competencies via

bespoke flexible learning arrangement

(including distant learning options)

delivered in partnership with external

providers. SelfD2

105.25 881.543 .613 .948

The organisation provides a wide range of

web-based learning resources (work and

non-work related) aligned to the

development needs of executives. SelfD3

105.74 895.818 .473 .949

Executives in strategise taking into account

ethical, holistic, current, and future

implications on the business. StraT1

104.76 870.103 .719 .946

Executives in maintain an awareness of

business environment changes and their

implications on the organisation. StraT2

104.17 880.466 .688 .947

Executives maintain close links with

customers in order to understand, attract,

and satisfy them more effectively than

competitors, often resulting in the creation

of differentiated, high added-value

products and services. StraT3

104.13 889.566 .599 .948

140

Items Scale Scale Corrected Cronbach

Mean if

Item is

Deleted

Variance

if Item is

Deleted

Item- 's α if

Total Item is

Correlatio Deleted

n

Executives embed new initiatives and

changes in our organisation by taking

account of inter-functional and cross-

organisational impact and effects. StraT4

105.02 883.308 .680 .947

Executives tend to react rapidly to

situations or events before they escalate to

critical financial, competitive, or leadership

difficulties for the organisation. StraT5

105.00 885.060 .596 .948

In addition, the corrected inter-item correlation among each item was between 0.4

and 0.7, consistent with the recommended range of 0.3 to 0.7 (Ferketich 1991; Polit

and Beck, 2008). Only two items (NetW1 and SelfD2) generated low corrected inter-

item correlations. The structure of the Cronbach’s α values and the inter-item

correlations together substantiate the adequacy, reliability, and internal consistency

of the measure. Consequently, no revision was made to the instrument on the basis of

reliability limitations.

Factorability of the measure was evaluated in terms of Bartlett’s test, which produced

a χ2 value of 2433.95 degree of freedom and significance level of 0.000. The KMO

test produced a measure of 0.91, which is well above the 0.60 score recommended by

Tabachnick and Fidell, (2007), confirming the adequacy of the sample population

and the suitability of applying factor analysis to the data.

Next, factor analysis by oblimin and varimax methodologies were independently

applied to verify the possible relationships among the set of underlying dimensions.

Both methodologies were employed to test the consistency of the outcome and

determine whether similarities and differences will emerge from the two rotational

approaches. The results of the extracted components associated with oblimin and

141

varimax rotational methodologies are respectively depicted in Tables 3.5 and 3.7

along with associated communalities in Tables 3.6 and 3.8.

Table 3.5: Results of Rotated Pattern Matrix for Direct Oblimin Rotation using

Maximum Likelihood Analysis.

Items Component

Factor 1 Factor 2 Factor 3 Factor 4

StraT2 .912 -.072 .060 -.049

StraT1 .789 -.125 .182 .073

StraT3 .616 .195 -.062 -.009

SelfD4 .489 .132 .131 .005

StraT4 .486 .177 -.052 .244

StraT5 .402 .171 -.133 .304

ExpE6 .388 .256 .099 .169

NetW1 .308 .189 .154 -.034

ExpE1 .073 .870 -.005 -.114

ExpE2 .076 .797 -.078 .043

ExpE3 -.061 .781 .110 -.048

ExpE5 .000 .505 .259 .093

ExpE4 .149 .494 -.027 .279

NetW4 .232 .335 .010 .241

StruC2 .159 .026 .840 -.098

StruC1 .093 .124 .696 .018

StruC4 .203 .069 .570 .153

SelfD2 .018 -.028 .513 .339

StrucC3 -.098 .122 .482 .268

ParT3 .140 .014 -.009 .824

ParT2 -.093 .140 .255 .607

NetW2 .260 .009 .172 .437

142

SelfD3 .074 -.126 .266 .423

ParT1 .189 .233 .080 .290

NetW3 .232 .261 .133 .277

Table 3.6: Communalities Table for Oblimin Extraction Rotation using Maximum

Likelihood Analysis.

Initial Eigen Values

Extraction Sums of Squared

Loadings

Rotation Sums of Squared

Loadings

Compone

nt

Total

% of

Varianc

e

Cumulati

ve %

Total

% of

Variance

Cumulativ

e %

Total

% of

Variance

Cumulativ

e %

1 11.41

1

45.643 45.643 11.41

1

45.643 45.643 4.327 17.308 17.308

2 2.120 8.481 54.124 2.120 8.481 54.124 4.042 16.167 33.474

3 1.296 5.184 59.307 1.296 5.184 59.307 3.951 15.803 49.277

4 1.019 4.074 63.382 1.019 4.074 63.382 3.526 14.105 63.382

Both the oblimin and varimax rotations generated four-factor solutions but differed

in terms of the distribution of items and the percentage of variance explained. In

selecting an optimal executive L&D measure, more consideration was given to the

factor structure than the differences in the percentage of variance explained in order

to maintain theoretical consistency. Further details on the emerging similarities and

differences in the rotational outputs are detailed as follows: First, both rotational

methodologies generated four cross-loadings of which three (ExpE6, NetW3, and

ParT1) were replicated under both methodologies but differed on the fourth – NetW1

cross-loaded under oblimin, but on the other hand, NetW4 cross-loaded under the

Varimax solution.

The five items associated with experiential L&D (ExpE1, ExpE2, ExpE3, ExpE4

&ExpE5) along with four items related to structured L&D (StruC1, StruC2, StruC3

& StruC4) were replicated under both oblimin and varimax solutions, although the

order of items under each underlying factor, structure and component differed

slightly. Having identified these similarities, the two remaining factor components

143

from both rotational methods were subjected to further inspection. Ignoring all the

cross-loaded items specified above, close examination of factor 1 associated with the

oblimin rotation, shows that five strategic L&D items are interposed by only one

self-directed item, which is a reasonable outcome (see Table 9). Furthermore, two

participative and one networking-related L&D items are allocated to factor 4, which

again offers good fit of the items. In sharp contrast, the items distributed under

factors 2 and 4 in the varimax solution produced a highly dispersed item distribution

pattern, thereby supporting the rejection of this output in favour of the solution

generated by the oblimin rotation.

Table 3.7: Results of Rotated Component Matrix for Varimax Rotation by Principal

Component Analysis.

Component Items

Factor 1 Factor 2 Factor 3 Factor 4

StruC2 .789 .359 .143 .059

SelfD2 .735 .145 .060 .327

StruC1 .726 .273 .228 .161

StruC3 .692 .051 .226 .189

StruC4 .682 .295 .201 .343

ParT2 .550 .099 .237 .496

StraT2 .210 .743 .179 .300

SelfD1 .214 .695 .206 .151

StraT1 .369 .689 .121 .308

StraT4 .043 .678 .329 .223

NetW1 .275 .559 .274 -.076

ExpE6 .260 .482 .399 .365

ExpE1 .084 .194 .814 -.023

ExpE3 .244 .194 .805 .023

ExpE2 .069 .247 .769 .247

ExpE5 .401 .169 .624 .152

ExpE4 .401 .169 .578 .430

144

Component Items

Factor 1 Factor 2 Factor 3 Factor 4

ParT1 .304 .302 .367 .332

ParT3 .427 .222 .193 .680

NetW2 .385 .258 .142 .628

SelfD3 .456 .032 -.069 .604

StraT4 .099 .496 .309 .539

StraT5 .039 .446 .283 .515

NetW3 .298 .349 .367 .477

NetW4 .161 .381 .402 .440

Costello and Osborne (2005) have questioned the reliability of constructs associated

with the varimax rotation, considering this approach suboptimal, as it is heavily

dependent on a range of assumptions, often absent in social science research. They

argue in support of the direct oblimin approach with maximum likelihood,

considering this approach more likely to produce optimal results (results that can be

generalised to other samples) than other extraction methods such as varimax,

promax, etc., supported by the results obtained for this study. The degree of

variability in the percentage of variance explained, associated with the oblimin and

varimax solutions are depicted in Tables 3.6 and 3.8.

145

Table 3.8: Communalities Table for Varimax Rotation using Principal Components

Analysis.

Initial Eigen values

Extraction Sums of Squared

Loadings

Rotation

Sums of

Squared

Loadings

Factor

Total

% of

Variance

Cumulative %

Total

% of

Variance

Cumulative

%

Total

1 11.411 45.643 45.643 10.970 43.879 43.879 8.219

2 2.120 8.481 54.124 1.709 6.836 50.715 7.144

3 1.296 5.184 59.307 .892 3.567 54.282 6.413

4 1.019 4.074 63.382 .655 2.620 56.902 6.971

Briefly, the variations in the total percentage of variance explained between the two

approaches were minimal ranging between 1.5% and 1.7% across the four factors.

For instance, the total variance explained by the first factor with oblimin was 43.9%

compared to 45.6% associated with varimax rotation (difference of 1.7%). The

percentage of variance explained registered slightly lower values with oblimin than

with varimax factors. Specifically, the scores associated with oblimin factors 2, 3,

and 4 correspond to 6.8%, 3.6%, and 2.6% respectively, compared to the varimax

extraction values of 8.5%, 5.2%, and 4.1%.

Subsequently, reviewing the oblimin solution through a theoretical lens resulted in

the elimination of some other items from the initial construct. This was achieved by

first deleting the four identified cross-loaded items associated with the oblimin

solution and then excluding three additional items (SelfD4, SelfD3, and StruC3)

based on theoretical misalignment with the overarching factor definition.

Justification for the exclusions is offered as follows: First, SelfD4 was eliminated

because it was considered a misfit with the five strategic L&D measures specified

under factor 1. Second, SelfD3 defined in terms of provision of a wide range of web-

146

based learning resources (work and non-work-related) aligned with the development

needs of executives does not fit logically among the two participative and the NetW2

L&D measures. Third, StruC3, “The organisation offers strong support (financial and

non-financial) to executives when they pursue non-work related studies”, although

originally specified as a structured L&D item, can be considered more as an enabler

rather than a clear measure of structured L&D. This item was excluded to maintain a

homogenous mix of clearly defined dimensions in the new construct.

On the other hand, the NetW2 item fitted logically with the two ParT measures on

the premise that promoting informal social activities among executives to stimulate

internal networking is most likely to encourage the incidence of participative

learning. Similarly, SelfD2, an item situated among the three structured L&D items

was retained because flexible learning dimensions delivered in partnership with

external providers is a form of structured L&D. Hence, the decision to retain this

item under this factor is theoretically justified.

Moreover, statistical rigour was applied to validate the final content of the EFA

measure by generating communalities and reliability measures for the remaining

items, with the combined outputs presented in Table 3.9. Deletions of additional

items did not diminish the content validity of the respective measures and all items

produced Cronbach’s α values above 0.90. Moreover, Bearden and Netemeyer et

al’s. (2003) recommendation of retaining corrected item-to-total correlations higher

than 0.5 was adhered to in this study.

147

Table 3.9: Exploratory Factor Analysis Item Communalities and Inter-item

Statistics.

Item-Total Statistics Communalities Factor

Scale

Mean if

Item is

Deleted

Scale

Variance

if Item is

Deleted

Corrected

Item-Total

Correlation

Squared

Multiple

Correlation

Cronbach's

α if Item is

Deleted

Initial

Extraction

NetW2 69.55 437.712 .653 .559 .929 .454 .498

ParT2 69.53 433.821 .658 .664 .929 .526 .603

Participative

L&D

ParT3 69.37 431.885 .716 .720 .928 .619 .827

StraT1 68.93 432.358 .721 .710 .927 .627 .694

StraT2 68.35 441.611 .662 .661 .929 .655 .743

StraT3 68.31 448.335 .568 .483 .931 .448 .490

Strategic

L&D

StraT4 69.19 443.754 .652 .553 .929 .483 .509

ExpE1 68.88 440.308 .600 .683 .930 .662 .775

ExpE2 68.80 440.779 .619 .697 .930 .650 .734

ExpE3 68.63 443.470 .569 .575 .931 .516 .568

ExpE4 69.40 437.772 .661 .557 .929 .423 .444

Experiential

L&D

ExpE5 69.20 435.181 .645 .493 .929 .402 .384

StruC2 69.02 432.664 .679 .663 .928 .636 .724

StruC4 69.35 425.237 .747 .674 .927 .598 .672

StruC1 69.21 431.337 .686 .665 .928 .572 .640

Structured

L&D

SelfD2 69.42 440.527 .611 .546 .930 .489 .523

Further examination of the communalities profile of the 16 remaining items (Table

3.10) indicates that all items apart from ExpE5 generated scores above 0.4, as

specified by Stevens (1992). Consequently, this item was deleted from the final

measure. Based on the foregoing analysis, there is sufficient evidence that the final

executive L&D measure encompassing 4 dimensions and 15 items exhibit good

unidimensionality, validity, and reliability characteristics. Accordingly, a much

broad measure of executive L&D conceptualised as the strategic, structured,

experiential, and participative (SSEP) measure is specified in Tables 3.9 and 3.10.

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Table 3.10: The Final 14-Item Executive L&D Measure.

14-Item Executive L&D Measure

Strategic L&D

Executives in the organisation strategise taking into account ethical,

holistic, current, and future implications on the business.

StraT1

Executives maintain an awareness of business environment changes and

their implications on the organisation.

StraT2

Executives maintain close links with customers in order to understand,

attract, and satisfy them more effectively than competitors, often resulting

in the creation of differentiated, high added-value products and services.

StraT3

Executives embed new initiatives and changes in the organisation by taking

into account inter-functional and cross-organisational impact and effects.

StraT4

Structured L&D

The organisation is highly supportive of executive attendance at

professional society seminars, conferences, and programmes to enhance

their skills and capabilities.

StruC2

Executives are offered coaching support to enhance their personal

effectiveness, leadership skills to facilitate the achievement of

organisational goals and targets.

StruC4

Executives are offered opportunities to develop new skills and

competencies via bespoke flexible learning arrangement (including distant

learning options) delivered in partnership with external providers.

SelfD2

Experiential L&D

Executives are encouraged to take risks, venture into unknown territories,

and experiment with new ideas to drive efficiencies in processes and cost

reduction.

ExpE1

Executives are encouraged to amend established organisational practices in

pursuit of increased efficiency and effectiveness.

ExpE3

Executives in learn quickly from past experiences, thus permitting growth,

change, adaptation, and creative problem-solving.

ExpE4

Executives are given the opportunity to participate in cross-functional

activities and stretch assignments such as organisational restructuring,

strategic initiatives, merger integrations, acquisitions targeting, etc., to

ExpE5

149

broaden their job scope and competencies.

Participative L&D

Executives engage in regular “away day” programmes which serve as a

forum for creating strategic ideas, generating solutions for specific

organisational problems, and developing interpersonal capabilities.

ParT2

The organisation organises regular briefings and activities to help

executives understand cross-organisational operational processes and

governance structures.

ParT3

The organisation frequently promotes informal social activities for

executives to stimulate internal networking, which helps them to forge

informal relations.

NetW2

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3.9.4 Confirmatory Factor Analysis

In order to examine the construct validity of the executive L&D measure,

confirmatory factor analysis (CFA) was performed on the four-factor model, with

AMOS 17.0. In addition to the four-factor model, a competing model was evaluated

(see Table 15). The competing model was formulated as a one-factor model.

Comparison of the goodness-of-fit indices between both models demonstrated the

superiority of the four-factor model. The CFA process was performed on the data

from phase two (N = 222) as well as phase one (N = 150) to ensure robustness of the

resulting measure of executive L&D.

A number of goodness-of-fit measures can be used in determining the degree to

which the data fits the proposed model as part of the CFA process (Arbuckle, 2003).

In addition to the χ2 goodness fit test, there are numerous ancillary indices of global

fit such as the goodness-of-fit index and adjusted-goodness-of-fit index, (GFI and

AGFI; Jöreskog & Sörbom, 1986), the comparative fit index (CFI, Bentler, 1990),

and the root mean square error of approximation (RMSEA, Steiger and Lind, 1980).

However, some of these indices such as the GFI, AGFI, (Bentler and Bonett, 1980),

and normed fit index (NFI) (Hu and Bentler, 1998) have been deemed less effective

in confirming model fit than other indices. Hu and Bentler recommend fit indices

that have different measurement properties, such as the incremental fit index (IFI) to

confirm model fit.

3.9.5 Results of Confirmatory Factor Analysis

Following the recommendations of Hu and Bentler (1995), several fit indices were

used to test the factor structure of the proposed and competing models of executive

L&D: The χ2, degrees of freedom (df), CFI, Tusker-Lewis index (TLI), Bollen’s

incremental fit index (IFI), NFI, GFI, AGFI, and RMSEA. Bentler and Bonnett

(1980) and Bentler (1992) proposed a value of 0.90 for normed indexes as a

minimum for model acceptance. Browne and Cudeck (1993) suggest that RMSEA

values less than 0.05 represent good fit, whilst values of 0.05 indicate a close fit, and

final values up to 0.08 represent reasonable errors of approximation in the

population.

151

The CFA analysis results from the phase one sample (N = 150) associated with the

one-factor executive L&D measure, generated the following fit indices: χ 2 = 365.5,

df = 77, χ2/df = 4.747, p = 0.0, CFI = 0.827, TLI = 0.796, IFI = 0.829, NFI = 0.793,

GFI = 0.721, AGFI = 0.619, and RMSEA = 0.139. The above results suggest that the

factor structure of the executive L&D measure for the phase one sample does not fit

the data well. The total sample χ2/df of 4.747 is outside the recommended tolerance

ratio of 2 or lower, suggested by Byrne (1989), required to demonstrate an acceptable

fit. Furthermore, the RMSEA of 0.139 indicates a bad fit (Bentler, 1992; Browne and

Cudeck, 1993). Likewise, the CFI = 0.827, TLI = 0.796, and IFI = 0.829 are all

outside the recommended 0.90 threshold required to demonstrate an acceptable fit

(Bentler, 1992). Moreover, other parameters, namely NFI = 0.793, GFI = 0.721, and

AGFI = 0.619 were all below the recommended 0.90 cut-off (Bentler, 1992),

suggesting that the one-factor executive L&D measure for the phase one sample

demonstrated an unacceptable fit with the data.

In contrast, in the CFA analysis for the phase one sample (N = 150), the four-factor

executive L&D measure generated the following fit indices: χ 2 = 698.2, df = 336,

χ2/df = 2.078, p = 0.0, CFI =0.932, TLI = 0.915, IFI = 0.933, NFI = 0.879, GFI =

0.864, AGFI = 0.806, and RMSEA = 0.048. The above results suggest that the four-

factor structure of the executive L&D measure for the phase one sample was

reasonably acceptable. The total sample χ2/df value of 2.078 is within tolerance of

the ratio of 2 or lower, as suggested by Byrne (1989) required to demonstrate an

acceptable fit. Furthermore, the RMSEA of 0.043 indicates a good fit (Bentler, 1992;

Browne and Cudeck, 1993). Likewise, the CFI = 0.932, TLI = 0.915, and IFI = 0.933

are all within the acceptable fit of 0.90 (Bentler, 1992). However, other parameters,

NFI = 0.879, GFI = 0.864, and AGFI = 0.806 were all below the recommended 0.90

cut-off (Bentler, 1992). Overall, the four-factor structure of the executive L&D

measure for the phase one sample demonstrated acceptable fit with the data

compared to the competing model (See Table 15).

Similarly, for the phase two sample (N = 222), the proposed four-factor executive

L&D model generated superior model fit compared to the competing counterpart.

For the phase two sample, the one-factor executive L&D measure generated the

following fit indices: χ2 = 417.7, df = 77, χ2/df = 5.373, p = 0.0, CFI = 0.821, TLI =

0.789, IFI = 0.823, NFI = 0.791, GFI = 0.726, AGFI = 0.626, and RMSEA = 0.141.

152

The above results suggest that the four-factor structure of the executive L&D

measure for the phase one sample did not fit the data well. The total sample χ2/df of

5.373 is outside the recommended tolerance ratio of 2 or lower suggested by Byrne

(1989), required to establish an acceptable fit. Furthermore, the RMSEA of 0.141

indicates a bad model fit (Bentler, 1992; Browne and Cudeck, 1993). Likewise, the

CFI = 0.821, TLI = 0.789, and IFI = 0.823 are all outside the recommended the 0.90

threshold for an acceptable fit (Bentler, 1992). Moreover, other parameters, NFI =

0.791, GFI = 0.726, and AGFI = 0.626 were all below the recommended 0.90 cut-off

(Bentler, 1992), suggesting that the one-factor executive L&D measure for the phase

one sample generated an unacceptable fit with the data.

On the other hand, the four-factor executive L&D model for the phase two sample

generated the following goodness-of-fit indices: χ2 = 102.8, df = 59, χ2/df = 1.742,

CFI = 0.974, TLI = 0.965, IFI = 0.974, NFI = 0.941, GFI = 0.935, AGFI = 0.900, and

RMSEA = 0.058. Comparing the above values with the values obtained for the phase

one model, significant improvement can be observed in some of the goodness-of-fit

indices, especially χ2/df = 1.742, CFI = 0.973, TLI = 0.965, and IFI = 0.974. In

addition, the NFI and GFI improved considerably above the 0.9 cut-off value.

Overall, the above results suggest that the four-factor structure model of the

executive L&D measure is reasonably acceptable. The ratio of χ2 to degrees of

freedom reflects a very good fit with the model for the phase two sample.

Importantly, the CFI, NFI, GFI, and AGFI are all well above the 0.90 criteria

required for specifying an acceptable fit (Bentler & Bonett, 1980). Additionally, the

RMSEA of 0.058 indicates that the factor structure underlying the executive L&D

measure is well supported. Table 15 presents the summarised model fit results for the

proposed and competing models of executive L&D for the data from both phases.

This indicates a reasonable improvement in the model fit parameters of the four-

factor executive L&D for the phase two sample compared to that for the phase one

sample. Importantly, it offers evidence in support of the superiority of the proposed

four-factor executive L&D model compared to the competing one-factor version.

Thus, based on the CFA results obtained for this study, it has been established that

executive L&D can be measured by four factors – strategic, experiential, structured,

and participative dimensions.

153

Table 3.11: Confirmatory Factor Analysis Results.

Good-of-

fit Index

n χ2 df χ2/df P CFI TLI IFI NFI RMSEA

Phase 1

(four-

factor

model)

150

698.2

336

2.078

.000

.932

.915

.933

.879

.048

Phase 1

(one-

factor

model)

150

365.5

77

4.747

.000

.827

.796

.829

.793

.139

Phase 2

(four-

factor

model)

222

102.8

59

1.742

.000

.974

.965

.974

.941

.058

Phase 2

(one-

factor

model)

222

417.7

77

5.373

.000

.821

.789

.823

.791

.141

3.9.6 Discriminant Validity Analysis

Discriminant validity can be determined by observing the values of the composite

reliability (CR) and variance extracted (VE) measures. Discriminant validity refers to

testing statistically whether two constructs differ, which means that the observed

variables for different latent constructs should not be highly correlated to conclude

that they are measuring the same thing. The violation of discriminant validity occurs

when there is conceptual overlap between two latent constructs.

The CR assesses the internal reliability of a construct and can be computed from the

structural equation model as suggested by Hair et al. (1998, 2006). The CR can be

represented mathematically as the squared sum of the standardized loading (λi) for

each construct, and the sum of the error variance terms for a construct (δi), where the

154

measurement error is one minus the square of the indicator’s standardised parameter

estimate (Garver and Mentzer, 1999):

Composite Reliability = (∑λi)2/[(λi)

2 + ∑i 1 - λi2]

(Adapted from Theo and Choo (2001); Garver and Mentzer [1999])

As a rule of thumb, CR estimates equal to or above 0.7 indicate good reliability (Hair

et al., 2006). The VE, on the other hand, measures the total amount of variance in the

indicators accounted for by the latent variable, and high values are produced when

the indicators are truly representative of the latent construct (Hair et al., 2006).

The VE formula is comparable to the CR formula, except that the numerator is equal

to the standardised parameter estimates (λ) between the latent variable and its

indicators squared and then summed. The denominator equals the numerator plus the

added measurement error for each item. The measurement error is one minus the

square of the indicator’s standardised parameter estimate.

Variance Extracted = ∑λi2/[∑iλ

2 + ∑i 1 - λi2]

(Adapted from Theo and Choo, [2001]; Garver and Mentzer, [1999])

Following a similar logic, VE values less than 0.5 indicate that, on average, more

errors remain in the items than the variance explained by the latent factor structure in

the measurement model, thereby leading to the conclusion that the indicators under

examination are not truly representative of the latent construct (Hair et al., 2006).

3.9.7 Discriminant Validity Analysis Results and Discussion

Table 3.12 reports that the results of the discriminant validity of the executive L&D

measure, based on the CR and the VE values. CR, which assesses the internal

reliability of a construct was computed from outputs from the structural equation

model as suggested by Hair et al. (1998, 2006), and a rule of thumb is that estimates

equal to or above 0.7 represent good reliability (Hair et al., 2006).

155

VE, a measure of the total amount of variance in the indicators accounted for by the

latent variable was computed to establish discriminant validity. Generally, high VE

values are produced when the indicators are truly representative of the latent

construct (Hair et al., 2006), and values above 0.5 represent adequate reliability.

As depicted in Table 16, all the four executive L&D constructs exceeded both the 0.7

cut-off for CR and 0.5 for VE, thus confirming adequate discriminant validity of the

measure. In addition, the fact that all the VEs for the constructs reported for this

study were greater than 0.70, implies that more than 70% of the variance of the

indicators can be accounted for by the latent variables.

Table 3.12: Discriminant Validity Results.

Name of Construct(s) Composite Reliability Variance Extracted

Experiential L&D 0.829 0.851

Strategic L&D 0.730 0.776

Structured L&D 0.764 0.801

Participative L&D 0.762 0.799

While discriminant validity was supported in the initial computation of the CR, the

overall outcome for the experiential L&D construct (0.710) was marginally close to

the 0.7 cut-off. However, by eliminating the item (ExpE2), the overall VE was

significantly improved to (0.829). Accordingly, item ExpE2 was excluded from the

final measure of executive L&D.

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Table 3.13: Inter-item and Item-total Correlation between Observed Items of

Executive L&D Measure.

Mean S.D StraT1 StraT2 StraT3 StraT4 ExpE1 ExpE3 ExpE4 ExpE5 StruC2 StruC4 SelD2 ParT2 ParT3 NetW2

StraT1 5.12 1.841 (.946)

StraT2 5.58 1.522 .596 (.947)

StraT3 5.31 1.622 .564 .567 (.947)

StraT4 4.60 1.873 .642 .590 .541 (.948)

ExpE1 4.89 1.797 .543 .514 .423 .528 (.948)

ExpE3 5.19 1.713 .584 .507 .444 .605 .617 (.947)

ExpE4 4.57 1.884 .576 .527 .515 .667 .586 .644 (.947)

ExpE5 4.80 1.854 .487 .495 .421 .567 .534 .568 .590 (.947)

StruC2 4.95 1.856 .269 .342 .353 .453 .328 .296 .385 .413 (.948)

StruC4 4.59 1.975 .385 .370 .370 .557 .398 .462 .458 .472 .648 (.946)

SelD2 4.71 1.807 .398 .356 .341 .509 .339 .394 .487 .408 .636 .704 (.948)

ParT2 4.22 1.984 .408 .396 .377 .547 .390 .382 .417 .514 .483 .592 .575 (.947)

ParT3 4.49 1.977 .440 .406 .381 .558 .390 .489 .569 .539 .496 .554 .624 .703 (.946)

NetW2 4.28 1.965 .412 .405 .406 .541 .442 .443 .597 .534 .549 .525 .640 .651 .675 (.947)

In addition, according to Cho (2006), if the inter-item correlations between items

within one factor are higher than those between items measuring different factors, the

measurement scale can be considered as having adequate discriminant validity. Table

3.13 presents the squared inter-item correlations among the observed variables in the

executive L&D measurement scale. From the results, the correlation score between

two items within the same factor is higher than that between items from different

factors, e.g. the squared correlation between StraT1 and StraT4 (0.642) is higher than

the correlation score related to StraT1 and StraT4. Hence, it can be concluded that

discriminant validity of the executive L&D measurement is justified.

In sum, based on the results of the EFA and CFA (phases 1 and 2) as well as the

discriminant validity analysis, there is sufficient empirical evidence that the 4-factor,

14-item, executive L&D measure is based on reasonably sound and well-founded

statistical and theoretical rigour.

157

Data Analysis Part 2 – Effects of executive L & D on

organisational performance

3.10 Ordinal Regression Analysis

Multivariate statistical techniques can be used to investigate the quantitative effects

of independent constructs on dependent variables. However, specification of the

statistical model and the selection of the appropriate technique is an important

component of the analysis phase of the research. Accordingly, the following section

will elaborate on the multivariate statistical modelling employed to examine the

effects of executive L & D in relation to the organisational performance measures.

Specifically, the regression models that deal with the ordinal variable will be

discussed. In this particular instance, the dependent organisational performance

variable is classified as ordinal, given that the categories representing a firm’s

success are ranked from lower 20% to upper 20%, but the distance between adjacent

categories remains unknown.

Often, ordinal dependent variables are treated as an interval, resulting in misleading

outcomes and interpretations (Long, 1997). To prevent these anomalies from

occurring in this study, the appropriate regression technique was adopted to cater for

the specific characteristics of ordinal data.

Ordinal dependent variables, and the study of how an ordered response variable

depends on a set of regressors (independent variables), have been widely discussed in

existing econometric and statistical literature (e.g. Long, 1997; Fuks and Salazar,

2008). One way to model such data is to assume that the ordered response is the

discrete version of a continuous latent variable for which a linear regression model

holds (Hosmer and Lemeshow, 1989; Long, 1997). Following existing literature,

there are different approaches for estimating the ordinal logistic model (Fuks and

Salazar, 2008; Long, 1997): proportional odds (1), partial proportional odds (2) and

generalised logit (3). The ordinal logit model – also called the proportional odds

model (POM) - is the most widely used latent ordinal regression model.

158

The fundamental assumption underpinning the ordinal logistic model with

proportional odds is that the relationship between each pair of groups of the

dependent variable is the same, i.e. the coefficients that describe the association

between the smaller categories versus the higher ones (or vice-versa) are the same.

This assumption is regularly referred to as the assumption of ‘parallel lines’ (Hosmer

and Lemeshow, 1989; Long, 1997). An additional assumption is that the disturbance

has a standard logistic distribution with the cumulative distribution function,

implying that this model is non-linear.

Logistic transformation of this non-linear model results in the ‘logit’ equation.

Generally, the ordinal logit model is interpreted in terms of the odds ratio of

cumulative probabilities (Long, 1997). Accordingly, this model is regularly referred

to as the proportional ‘odds’ model and, in the statistical literature, this ordered logit

regression model is discussed as an extension of the ordinary logistic model

(McCullagh, 1980).

3.10.1 Goodness of Fit and Test of Significance

In ordinal regression analysis, the goodness of the model fit needs to be investigated,

thus allowing statistical inference to be made. In addition, statistical tests are

required to test the accuracy and significance of the overall model and each

individual coefficient.

The -2 Log likelihood value (-2 LL) reflects the probability that the estimated values

fit the empirical data (Hair, 2010). The measure -2LL is also called deviance and is

comparable to the coefficient of determination in ordinal least square regressions

(OLS). In addition, the Pseudo R² Nagelkerke is reported. There is no precise

measure of determination in ordered logit regression models. Comparison of the

respective Pseudo R² Nagelkerke provides an idea about the contribution of one

model over and above another, and about improvements in terms of accuracy. To

investigate the significance of the overall ordered logit model, the likelihood ratio

(LR) Chi-squared test is applied. As suggested in the model theory of regression, a

Wald-test is applied to test the significance of each individual coefficient/odds ratio

(Hosmer and Lemeshow, 1989; Long, 1997). For both tests, common standards and

significance levels are applied to falsify the null hypotheses.

159

3.10.2 Procedures for testing Hypothesis H1: Executive L & D will generate

positive effects on organisational performance measures

Following the recommendations of previous researchers (e.g. Ichniowski et al., 1997;

Horgan and Muhlau, 2006) investigating the organisational performance effects of

HRM dimensions, based on the ordered categorical data, the ordinal regression

procedure was applied to this study. In addition, data collected for each individual

item of the executive L & D measure was aggregated and regressed against the

organisational performance measures (controlling for the effects of individual,

organisational and environmental factors).

In evaluating the effects of executive L & D on organisational performance variables,

a four-model ordinal regression procedure was conducted in the following order.

First, the individual-level control variables (gender, title and executive experience)

were introduced in Model 1, followed by the firm-specific control variables in Model

2. Next, the environmental (regional and industry) effects were examined in Model

3. Finally, in Model 4, the effects of the executive L & D measure were assessed

against the organisational performance variables, observing the effects of the Chi-

square and the pseudo R-square changes. Comparison of the respective Nagelkerke

Pseudo R-squared provided an indication about the incremental contribution of one

model over and above another, and this served as a measure of improvements in

model accuracy. Furthermore, as suggested in the model theory of logistic and

ordinal regression, the Wald-test was applied to test the significance of each

individual coefficient/odds ratio (Hosmer and Lemeshow, 1989; Long, 1997). For

both tests, common standards and significance levels were applied to falsify the null

hypotheses.

Finally, to establish the effects of significant predictors of executive L & D on the

organisational performance measures, the exponent of coefficients of significant

predictors of variables, and odds ratio (OR), were computed. The odds ratio indicates

the degree to which the odds of the organisational performance indicators increase

(or decrease) in response to a unit change in the associated executive L & D measure.

Generally, an odds ratio of '1' represents no change in the odds after a one unit

change in the predictor (executive L & D), a value of '2' implies that the odds of the

outcome (organisational performance) are twice as high in response to the predictor,

160

whereas a value of '0.2' suggests the odds are likely to decrease by four-fifths (or

80%).

3.10.3 Procedure for testing Hypothesis H2: Executive L & D effects on

organisational performance will vary by sector (service and industry)

In order to test the hypothesis H3, that the organisational performance effects of

executive L & D will differ by service and industry, the data were split by sectors

(service n= 149; industry n= 73). Ordinal regression procedures implemented in H1

were repeated for Models 1 – 4, observing differences in the model fit (Chi-square

and pseudo R-squared) and the significant predictors. In contrast to H1, the firm

sector controls were excluded in Model 3, to avoid duplication of this variable in the

analysis.

3.10.4 Procedure for testing Hypothesis H3: Executive L & D effects on

organisational performance will differ by firm size (SME / Non-SME)

The procedures employed in H4 are replicated from H3 above, but in this specific

case, firm size was excluded as a control variable to avoid duplication of effects in

the model. Furthermore, for the purpose of this analysis, SMEs (N= 68) are classified

as firms with employees ranging from 0 - 250 and non-SMEs (N=154) represent

organisations with over 250 employees.

3.10.5 Reliability of Organisational Performance

The reliability of the organisational performance measurement model is tested by

Cronbach’s alpha (0.908>0.7, Nunnally, 1978), which is satisfied to indicate the

internal consistency among the observed variables. The inter-item and item-total

correlation is also adopted to justify the scale reliability (Table 3.15). The

coefficients of item-total correlation of all five items are higher than 0.50 (Netemeyer

et al., 2003), which means that each item is consistent with the rest of the items on

the scale. Regarding the inter-item correlation, all the coefficients are higher than 0.4

(Clark and Watson, 1995). All three indicators show that the reliability of the

organisational performance measurement scale is satisfied.

161

Table 3.15: Inter-item and item-total correlation between observed items of

organisational performance.

Mean S. D FinP CustSat InnovP EmpE MSG

FinP 3.54 1.163 1.000

CustSat 3.69 1.124 .684 1.000

InnovP 3.45 1.179 .599 .707 1.000

EmpE 3.22 1.269 .583 .653 .712 1.000

MSG 3.31 1.172 .703 .701 .647 .673 1.000

3.10.6 Common method variance

As already discussed in section 3.6 (Samples descriptions & data collection

procedures), the examination of the effects of executive L & D on organisational

performance was based on self-reported data collected through the same

questionnaire, in the same period of time, and will therefore be subjected to some

degree of the common method variance. This is a variance attributed to the

measurement method, rather than to the constructs of interest.

This might cause systematic measurement errors and generate further bias of the

estimation of the true relationship between theoretical constructs. Consequently,

method variance can either inflate or deflate observed relationships between

constructs, thus generating Type I and Type II errors (Doty and Gulick, 1998;

Podsakoff et al., 2003; Podsakoff and Organ, 1986; Spector, 1994). To mitigate

common method problems, design techniques recommended by Podsakoff et al.

(2003) were followed. This included psychological or methodological separation of

measurement, protecting respondent anonymity and reducing evaluation

apprehension (focusing on the executive L& D measure without prior notification of

the collection of the organisational performance effects).

Another technique used to minimise common methods effects involved improving

scale items (applying a 7-point Likert scale to the executive L & D measure,

compared with the 5-point scale for the subjective organisational performance

variables, where respondents benchmarked their business unit performance against

competitors in their primary industry, over the last three years).

162

Furthermore, the organisational performance measures were anchored in the

following order: ‘1’ = lowest 20%; ‘2’ = next 20%; ‘3’ = middle 20%; ‘4’ = next

20%; ‘5’ = top 20%. The executive L & D measures were scaled from 1 = Strongly

disagree; ‘2’ = Moderately disagree; ‘3’ = Slightly disagree; ‘4’ = Neutral; ‘5’ =

Slightly agree; ‘6’= Moderately agree; ‘7’ Strongly agree.

Harman’s one-factor test and confirmatory factor analysis and post-hoc statistical

tests were conducted to test the presence of common method effect. All the 19

variables (14 executive L & D and 5 organisational performance measures) were

entered into a principal axis analysis, using unrotated principal components to

determine the number of factors that are necessary to account for the variance among

the variables. The rule of thumb applied is that if a substantial amount of common

method variance is present, either (a) a single factor will emerge from the factor

analysis or (b) one general factor will account for more than 50% of the covariance

among the variables (Aulakh and Gencturk, 2000; Krishnan et al., 2006; Podsakoff et

al., 2003; Steensma et al., 2005). In addition, all 19 executive L & D and

organisational performance variables were loaded on one factor to examine the fit of

the confirmatory factor analysis model. If common method variance was largely

responsible for the relationship among the variables, the one-factor CFA model was

expected to fit the data well (Korsgaard and Roberson, 1995; Mossholder et al.,

1998; Podsakoff et al., 2003).

3.10.7 Results of Common Methods Bias Test

As specified in section 3.10.6, Harman’s one-factor analysis, confirmatory factor

analysis and post-hoc statistical tests were conducted to test the presence of common

method effect based on the 19 variables (executive L & D and organisational

performance measures). These variables were entered into a principal axis analysis,

using unrotated principal components to determine the number of factors that were

necessary to account for the variance among the variables.

The results of the unrotated principal axis analysis revealed the presence of three

distinct factors with Eigen value greater than 1.0, rather than a single factor. The

three factors together accounted for 67 per cent of the total variance, which was

above the recommended cut-off point of 50%; the first (largest) factor accounted for

22%. Moreover, the confirmatory factor analysis showed that the single-factor model

163

did not fit the data well, χ2 (N=222) = 3.701, p=0.000, GFI= 0.732; CFI= 0.740;

TLI= 0.821; RMSEA = 0.106.

While the above results do not preclude the possibility of common method variance,

they do suggest that common method variance is not of great concern and thus is

unlikely to confound the interpretations of results in this study. Furthermore,

Conway and Lance (2010) recommend that substantial method effects can be ruled

out by offering demonstrable construct validity, which is well supported in this

study.

164

Chapter Four: Results

4.0 Introduction

This chapter covers the results of the ordinal regression analyses, examining the

relationship between executive learning and development and organisational

performance, including the effects of size and sector to confirm hypotheses H1, H2

and H3. A summary of the outcome of the hypotheses developed in Chapter 3,

including the significant predictors of executive learning and development associated

with the respective organisational performance measures, are presented at the end of

each section.

4.1 Results of executive L & D effects on organisational performance

(N=222)

Table 4.1 presents the ordinal regression results for the effects of executive L & D

on the composite organisational performance measure. For each regression model,

the beta (B), standard estimates (SE), Chi-square, Wald and the Negelkerke R-square

are presented. In addition, the important odds ratio (OR), which is an exponential of

the beta coefficient (Exp (B)), is computed for each executive L & D variable.

In Model 1, marginal effects of the control variables – gender, title and executive

experience – were observed (Negelkerke R-squared, .059; Chi-square, 12.699; p<

.050). Model 2 produced further contributions over and above Model 1 (Negelkerke

R-squared, .134; Chi-square, 30.091; p< .050), suggesting that firm age and size

generated positive effects on organisational performance. Significant effects of

control variables related to executive title and firm size were observed. Specifically,

vice-presidents were more likely to predict higher organisational performance

compared to their peers (Beta: 1.354; Wald: 4.824, p=.028). Firm size effects

observed suggest that larger firms with 1,000-5,000 or 5,000-10,000 employees were

more likely to predict greater effects of executive L & D on organisational

performance, based on statistically significant effects (Beta: 2.009; Wald: 4.833;

p=.028 and Beta: 2.145; Wald: 4.230; p=.040, respectively).

165

166

Model 3 reported an improvement (Negelkerke R-squared, .175; Chi-square, 39.922;

p< .050) above Model 2. The previous observation that vice-presidents were more

likely to predict higher organisational performance, compared to their peers in Model

2, was maintained in Model 3 (Beta: .632; Wald: 5.733; p=.017).

Model 4 reports a significant improvement over and above Model 3, (Negelkerke R-

squared, .452; Chi-square, 120.987; p< .050) and all four variables of executive L &

D generated significant effects on the organisational performance measure, in the

following order of magnitude: strategic L & D (Beta: .539; OR: 1.71; Wald: 5.738;

p=.017), structured L & D (Beta: .411; OR: 1.51; Wald: 4.390; p=.036),

experiential L & D (Beta: .388; OR: 1.47; Wald: 3.535; p=.042) and participative L

& D (Beta: .388; OR: 1.43; Wald: 2.970; p=.047).

For strategic L & D, the odds ratio (1.71) suggests that organisational performance is

likely to increase by 1.71, for each unit enhancement in the strategic L & D variable.

Likewise, the odds ratio (1.51) related to structured L & D is an indication that

organisational performance is likely to increase by 1.51, for each unit enhancement

in the structured L & D variable. Similarly, the odds ratio (1.47) associated with

experiential L & D suggests that organisational performance is likely to increase by

1.47, for each unit enhancement in the experiential L & D variable. Finally, the odds

ratio (1.43) associated with participative L & D suggests that organisational

performance is likely to increase by 1.43, for each unit enhancement in the

participative L & D variable.

Other control variables, such as gender and experience, produced no noticeable

effects on the predictability of executive L & D for organisational performance

(Table 4.1).

Table 4.1: Ordinal Regression Analysis results – Executive L & D effects on organisational performance (Total Sample, N=222).

Model 1 Model 2 Model 3 Model 4

B SE Wald Sig B SE Wal

d

Sig B SE Wal

d

Sig B SE Wal

d

Sig

Executive L & D

Strategic .539 .222 5.738 .017

Experiential .388 .226 3.535 .042

Structured .411 .191 4.390 .036

Participative .357 .212 2.970 .047

Gender

Male .779 1.341 .338 .561 1.084 1.383 .615 .433 .912 1.408 .419 .517 .649 1.448 .201 .654

Female .423 1.346 .099 .754 .587 1.387 .179 .672 .543 1.411 .148 .700 .461 1.448 .102 .750

Title

CEO -.056 .456 .015 .902 .068 .488 .019 .890 .076 .499 .023 .880 -.468 .529 .781 .377

Top Level

Executive

-.128 .460 .077 .781 -.034 .484 .005 .943 -.123 .489 .064 .801 -.227 .512 .197 .657

Senior Vice

President

.127 .587 .047 .828 .482 .622 .601 .438 .185 .635 .085 .771 .172 .657 .069 .793

Vice President .806 .583 1.912 .167 1.354 .616 4.82

4

.028 1.513 .632 5.733 .017 1.047 .666 2.467 .116

Director -.182 .384 .225 .635 -.172 .399 .185 .667 -.217 .406 .284 .594 -.491 .428 1.316 .251

167

Model 1 Model 2 Model 3 Model 4

B SE Wald Sig B SE Wal

d

Sig B SE Wal

d

Sig B SE Wal Sig

d

Divisional

Manager

-.609 .527 1.335 .248 -.684 .541 1.59

9

.206 -.561 .552 1.032 .310 -.309 .578 .285 .593

Senior

Management

.425 .384 1.231 .267 .576 .399 2.08

2

.149 .531 .404 1.723 .189 .414 .423 .960 .327

Middle

Management

0a . . . 0a . . 0a . . . 0a . . .

Executive

Experience

0 - 5 years -.449 .522 .742 .389 -.618 .544 1.29

2

.256 -.587 .559 1.104 .293 -.331 .589 .315 .575

5 - 10 years -.488 .532 .841 .359 -.621 .554 1.25

4

.263 -.487 .571 .727 .394 -.372 .605 .379 .538

10 - 15 years -.276 .553 .249 .617 -.482 .578 .696 .404 -.275 .602 .208 .648 .003 .637 .000 .996

20 - 25 years .327 .650 .254 .615 .279 .674 .171 .679 .537 .692 .603 .438 .323 .735 .193 .661

Over 25 years 0a . . . 0a . . . 0a . . . 0a . . .

Firm Age

(years)

5-10 -2.228 2.022 1.21

4

.271 -1.328 2.045 .422 .516 -.006 2.092 .000 .998

10-20 -2.753 2.041 1.81 .177 -1.862 2.066 .813 .367 -.242 2.127 .013 .909

168

Model 1 Model 2 Model 3 Model 4

B SE Wald Sig B SE Wal

d

Sig B SE Wal

d

Sig B SE Wal Sig

d

9

20-30 -3.178 2.031 2.44

7

.118 -2.368 2.050 1.334 .248 -.343 2.104 .027 .870

30-40 -2.641 2.020 1.71

0

.191 -1.672 2.042 .670 .413 -.078 2.091 .001 .970

40-50 -2.541 1.996 1.62

1

.203 -1.765 2.014 .768 .381 -.276 2.060 .018 .894

Over 50 0a . . . . 0a . . .

Firm Size (No of

employees)

0 – 250 -1.081 .844 1.64

0

.200 -.735 .862 .726 .394 .224 .914 .060 .806

250 – 1,000 -.589 .817 .520 .471 -.240 .831 .084 .772 .684 .877 .609 .435

1,000 – 5,000 -.630 .822 .587 .444 -.405 .832 .237 .626 .831 .887 .877 .349

5,000 –10,000 2.009 .914 4.83

3

.028 1.760 .929 3.587 .058 .088 .991 .008 .929

10,000 – 50,000 2.145 1.043 4.23

0

.040 1.763 1.054 2.799 .094 1.190 1.095 1.181 .277

50,000 –100,000 .024 .959 .001 .980 .232 .970 .057 .811 .965 1.022 .892 .345

Over 100,000 0a . . . 0a . . . 0a . . .

Sector

169

Model 1 Model 2 Model 3 Model 4

B SE Wald Sig B SE Wal

d

Sig B SE Wal

d

Sig B SE Wal Sig

d

Industry .208 .271 .588 .443 .055 .284 .037 .848

Service 0a . . 0a . .

Location

UK -.385 .415 .862 .353 -.292 .452 .418 .518

US .468 .410 1.303 .254 .577 .435 1.758 .185

Australasia -.770 .474 2.637 .104 -.578 .502 1.326 .250

EU -.039 .430 .008 .927 .319 .454 .493 .482

Africa 0a . . . 0a . . .

Negelkerke R-

squared

0.059 0.134 0.175 0.452

Change in

Negelkerke R-

squared

- 0.075 0.041 0.277

Chi-Square 12.724 30.091 39.922 120.987

Change in Chi-

Square

- 17.367 9.831 81.065

-2 LL 360.686 566.774 588.488 504.447

170

171

Model 1 Model 2 Model 3 Model 4

B SE Wald Sig B SE Wal

d

Sig B SE Wal

d

Sig B SE Wal

d

Sig

N = 222, df =13, p<.001 N = 222, df =24, p<.001 N = 222, df =29, p<.001 N = 222, df = 33, p<.001

Notes: B=beta coefficient; SE = standard error.

4.1.1 Summary of results for Hypothesis H1: executive L & D will generate

positive effects on organisational performance

Table 4.2 presents a high-level summary and ranking of the significant predictors of

executive L & D on organisational performance, with details of the beta (B),

standard estimate (SE), significance level (Sig: <.05) and odds ratio (OR) for each

variable. Based on the Wald and significance level values, strategic L & D produced

the most significant effect, and participative L & D generated the least effect, on

organisational performance.

Table 4.2: Summary of the significant predictors of executive L & D on

organisational performance.

Significant Predictors of Executive L & D on

Organisational Performance - N=222

Executive L &

D

B SE Wald Sig OR

(Exp B)

Strategic .539 .222 5.738 .017 1.71 Structured .411 .191 4.390 .036

172

1.51

Experiential .388 .226 3.535 .042 1.47

Participative .357 .212 2.970 .047 1.43

Referring back to Table 4.1, the R-square and Chi-square reported from the ordinal

regression models indicate a significant increase in magnitude in Model 3 over

Model 4 (change in R-square, .277; change in Chi-square, 81.065; p<.050). Given

the observed statistically significant increases in the magnitude of model fit

parameters, hypothesis H1 – that executive L & D affects organisational performance

is supported.

173

4.2 Results for the Executive L & D effects on organisational

performance (service sector, N=149)

Table 4.3 presents the ordinal regression results for the effects of executive L & D

on the composite organisational performance measure within the service sector. For

each regression model, the beta (B), standard estimates (SE), Chi-square, Wald and

the Negelkerke R-square are presented. In addition, the important odds ratio (OR),

which is an exponential of the beta coefficient (Exp (B)), is computed for each

executive L & D variable.

In Model 1, marginal effects of the control variables – gender, title and executive

experience – were observed (Negelkerke R-squared, .116; Chi-square, 15.323; p<

.050). Significant effects of the control variable related to one specific executive title

were observed. Specifically, vice-presidents were more likely to predict higher

organisational performance compared to their peers (Beta: 2.098; Wald: 6.424;

p=.011). Model 2 produced further contributions over and above model 1

(Negelkerke R-squared, .249; Chi-square, 31.910; p< .050), suggesting that firm age

and size generated positive effects on organisational performance. Here too,

significant effects of the control variables related to executive title and firm size were

observed. As previously observed, vice-presidents were more likely to predict higher

organisational performance compared to their peers (Beta: 2.935; Wald: 10.481;

p=.001). The observed effects of firm size suggest that larger firms with employees

of 5,000-10,000 were more likely to predict greater effects of executive L & D on

organisational performance, given the statistically significant effects (Beta: 1.106;

Wald; 1.057; p=.035).

Model 3 reported an improvement (Negelkerke R-squared, .374; Chi-square, 42.742;

p< .050) above Model 2. The previous observation, that vice-presidents were more

likely to predict higher organisational performance compared to their peers in Model

2, was maintained in Model 3 (Beta: .632; Wald: 5.733; p=.017).

Model 4 reports a significant improvement over and above Model 3 (Negelkerke R-

squared, .562; Chi-square, 74.466; p< .050) and only experiential L & D (Beta:

.608; OR; 1.72; Wald: 4.281; p=.039) generated significant effects on the

174

organisational performance measure. The odds ratio (1.72) associated with

experiential L & D suggests that organisational performance for the service sector is

likely to increase by 1.72, for each unit enhancement in the experiential L & D

variable.

As depicted in Table 4.3, the other variables did not reach statistical significance at

p<.050: strategic L & D (Beta: .542; OR: 1.72; Wald: 3.738; p=.060), structured L

& D (Beta: .306; OR: 1.36; Wald: 1.502; p=.220), and participative L & D (Beta:

.070; OR: 1.07; Wald: 0.061; p=.805).

The previous observation that vice-presidents were more likely to predict higher

organisational performance compared to their peers in Model 3, was maintained in

Model 4 (Beta: 2.738; Wald: 7.288; p=.007).

The other control variables, such as gender and experience, produced no noticeable

effects on the predictability of executive L & D for innovation performance (see

Table 4.3).

Table 4.3: Ordinal Regression results – Executive L & D effects on organisational performance (Service Sector, N=149).

Model 1 Model 2 Model 3 Model 4

B SE Wald Sig B SE Wald Sig B SE Wald Sig B SE Wal

d

Sig

Executive L & D

Strategic .542 .288 3.546 .060

Experiential .608 .294 4.281 .039

Structured .306 .250 1.502 .220

Participative .070 .284 .061 .805

Gender

Male .718 1.370 .274 .600 1.159 1.448 .640 .424 .804 1.471 .298 .585 .401 1.512 .070 .791

Female .375 1.382 .074 .786 .840 1.463 .330 .566 .600 1.485 .163 .686 .494 1.520 .105 .745

Title

CEO .172 .568 .092 .762 .450 .603 .555 .456 .573 .619 .857 .355 -.060 .644 .009 .925

Top Level

Executive

.757 .580 1.700 .192 .868 .643 1.823 .177 .835 .665 1.578 .209 .334 .688 .235 .628

Senior Vice

President

.575 .689 .696 .404 1.136 .738 2.365 .124 .979 .755 1.681 .195 .789 .773 1.042 .307

Vice President 2.098 .828 6.424 .011 2.935 .907 10.481 .001 3.194 .935 11.665 .001 2.738 1.014 7.288 .007

Director .304 .469 .420 .517 .447 .511 .763 .382 .486 .517 .884 .347 .038 .534 .005 .943

175

Model 1 Model 2 Model 3 Model 4

B SE Wald Sig B SE Wald Sig B SE Wald Sig B SE Wal

d

Sig

Divisional

Manager

-.620 .653 .902 .342 -.492 .688 .512 .474 -.419 .698 .360 .549 .070 .731 .009 .924

Senior

Management

.775 .472 2.695 .101 .992 .503 3.882 .049 .921 .510 3.255 .071 .787 .524 2.258 .133

Middle

Management

0a . . . 0a . . . 0a . . . 0a . . .

Executive

Experience

0 - 5 years -.055 .597 .009 .926 -.624 .643 .942 .332 -.735 .659 1.242 .265 -.443 .680 .425 .515

5 - 10 years -.361 .618 .342 .559 -.877 .670 1.714 .190 -.891 .681 1.712 .191 -.673 .701 .923 .337

10 - 15 years .001 .634 .000 .999 -.504 .684 .544 .461 -.523 .707 .547 .460 -.122 .731 .028 .868

20 - 25 years .402 .822 .239 .625 .240 .902 .071 .791 .250 .919 .074 .785 .220 .951 .054 .817

Over 25 years 0a . . . 0a . . . 0a . . . 0a . . .

Firm Age

(years)

5-10 -2.673 2.105 1.611 .204 -2.153 2.151 1.002 .317 -.482 2.205 .048 .827

10-20 -3.531 2.135 2.735 .098 -2.949 2.176 1.837 .175 -1.141 2.246 .258 .611

20-30 -4.030 2.116 3.626 .057 -3.547 2.144 2.737 .098 -.974 2.210 .194 .659

176

Model 1 Model 2 Model 3 Model 4

B SE Wald Sig B SE Wald Sig B SE Wald Sig B SE Wal

d

Sig

30-40 -3.846 2.100 3.355 .067 -3.162 2.138 2.188 .139 -.808 2.195 .136 .713

40-50 -3.640 2.064 3.109 .078 -3.175 2.090 2.306 .129 1.399 2.138 .428 .513

Over 50 0a . . . . 0a . . .

Firm Size (No of

employees)

0 – 250 .004 .931 .000 .175 -1.111 .993 1.253 .263 -.108 1.048 .011 .918

250 – 1,000 -.404 .938 .186 .997 .233 .951 .060 .807 .969 .994 .951 .330

1,000 – 5,000 1.409 1.094 1.657 .667 -.338 .951 .126 .723 .884 1.012 .763 .382

5,000 –10,000 2.494 1.183 4.440 .198 -1.240 1.113 1.240 .265 .776 1.190 .425 .514

10,000 – 50,000 1.106 1.076 1.057 .035 2.236 1.210 3.417 .065 1.212 1.245 .948 .330

50,000 – 100,000 0a . . .304 1.225 1.092 1.260 .262 1.709 1.134 2.273 .132

Over 100,000 . 0 a . . .

Location

UK -.604 .525 1.323 .250 -.499 .558 .800 .371

US .096 .532 .033 .856 .331 .565 .345 .557

Australasia -.959 .612 2.456 .117 -.773 .635 1.480 .224

EU -.268 .559 .230 .632 -.015 .575 .001 .979

Africa 0a . . . 0a . . .

177

178

Model 1 Model 2 Model 3 Model 4

B SE Wald Sig B SE Wald Sig B SE Wald Sig B SE Wal

d

Sig

Negelkerke R-

squared

0.116 0.249 0.374 0.562

Change in

Negelkerke R-

squared

0.133 0.125 0.188

Chi-Square 15.323 31.91 42.742 73.466

Change in Chi-

Square

16.587 10.832 30.724

-2 LL 279.463 374.810 381.068 347.275

N = 149, df =13 , p<.001 N = 149, df =24 , p<.001 N = 149, df =28 , p<.001 N = 149, df =32 , p<.001

Notes: B=beta coefficient SE = standard error.

179

4.2.1 Summary of results for executive L & D effects on organisational

performance for the service sector

Table 4.4 presents a summary of the significant predictors of executive L & D on

organisational performance for the service sector, with details of the beta (B),

standard estimate (SE), significance level (Sig: <.05) and odds ratio (OR) for each

variable.

Table 4.4: Summary of the significant predictors of executive L & D on

organisational performance for the service sector.

Significant Predictors of Executive L & D on

Organisational Performance (Service Sector) - N=149

Executive L &

D

B SE Wald Sig OR

(Exp B)

Experiential .608 .294 4.281 .039 1.84

Strategic .542 .288 3.546 .060 1.72

Structured .306 .250 1.502 .220 1.36

Participative .070 .284 .061 .805 1.07

Based on the Wald and significance level values, for the service sector, experiential

L & D (Wald: 4.281; p=.039) produced the most significant effect and participative

L & D (Wald: 0.060; p=.805) generated the least effect on organisational

performance.

4.3 Results of the executive L & D effects on organisational performance

(industry sector, N=73)

Table 4.5 presents the ordinal regression results for the effects of executive L & D

on the composite organisational performance measure within the industry sector. For

each regression model, the beta (B), standard estimate (SE), Chi-square, Wald and

the Negelkerke R-square are presented. In addition, the important odds ratio (OR),

which is an exponential of the beta coefficient (Exp (B)), is computed for each

executive L & D variable.

180

In Model 1, marginal effects of the control variables – gender, title and executive

experience – were observed (Negelkerke R-squared, .151; Chi-square, 12.009; p<

.050). Model 2 produced further contributions over and above Model 1 (Negelkerke

R-squared, .293; Chi-square, 35.437; p< .050), suggesting that firm age and size

generated positive effects on organisational performance. Significant effects of

control variables relating to executive title were observed. Specifically, top-level

executives were more likely to predict higher organisational performance, compared

to their peers (Beta: .923; Wald: 6.770; p=.009).

Model 3 reported an improvement (Negelkerke R-squared, .374; Chi-square, 49.485;

p< .050) above Model 2. However, the previous observation that top-level executives

were more likely to predict higher organisational performance, compared to their

peers in Model 2, was dissipated in Model 3 (Beta: -2 .739; Wald: 6.178; p=.013).

Model 4 reported a significant improvement over and above Model 3 (Negelkerke R-

squared, .671; Chi-square, 97.016; p< .050) and only participative L & D (Beta:

.783; OR: 2.19; Wald: 5.113; p=.024) generated significant effects on the

organisational performance measure. The odds ratio (2.19), associated with

participative L & D, suggests that organisational performance for the industry sector

is likely to increase by 2.19 for each unit enhancement in the participative L & D

variable.

As depicted in Table 4.5, the other variables did not reach statistical significance at

p<.050: experiential L & D (Beta: .367; OR: 1.44; Wald: 1.386; p=.239) structured

L & D (Beta: .227; OR: 1.25; Wald: 0.980; p=.322) and strategic L & D (Beta:

.293; OR: 1.34; Wald: .820; p=.365).

The other control variables, such as gender and experience, produced no noticeable

effects on the predictability of executive L & D for innovation performance (see

Table 4.5).

Table 4.5: Ordinal Regression results – Executive L & D effects on organisational performance (Industry sector, N=73).

Model 1 Model 2 Model 3 Model 4

B SE Wald Sig B SE Wald Sig B SE Wald Sig B SE Wald Sig

Executive L & D

Strategic .293 .323 .820 .365

Experiential .367 .312 1.386 .239

Structured .227 .229 .980 .322

Participative .783 .258 5.113 .024

Gender

Male .469 .516 .825 .364 .591 .589 1.007 .316 .374 .617 .367 .545 .477 .667 .510 .475

Female 0a . . . 0a . . . 0a . . . 0a . . .

Title

CEO .463 .811 .326 .568 2.947 1.091 7.297 .060 -2.518 1.056 5.689 .055

Top Level

Executive

1.505 .826 3.316 .069 2.403 .923 6.770 .009 -2.739 1.102 6.178 .013 -1.032 1.706 .366 .054

Senior Vice

President

.264 1.224 .046 .829 1.167 1.480 .622 .430 -2.734 .970 7.943 .005 -.921 1.325 .483 .545

Vice President .849 .957 .787 .375 -.295 1.146 .066 .797 -.956 1.562 .374 .541 -1.799 .888 4.103 .487

Director 1.209 .713 2.873 .090 -1.364 .758 3.238 .072 -.619 1.217 .259 .611 .162 1.205 .018 .073

181

Model 1 Model 2 Model 3 Model 4

B SE Wald Sig B SE Wald Sig B SE Wald Sig B SE Wald Sig

Divisional

Manager

.350 .954 .135 .714 -.343 1.013 .114 .735 -1.612 .806 4.001 .045 -.516 .915 .317 .893

Senior

Management

.066 .705 .009 .926 -.377 .793 .226 .634 .398 1.113 .128 .721 0a . . .573

Middle

Management

0a . . . 0a . . . -.182 .833 .048 .827 -2.343 1.188 3.888 .

Executive

Experience

.

0 - 5 years .717 1.192 .362 .547 .360 1.376 .068 .794 1.096 1.448 .573 .449 .741 1.566 .224 .636

5 -10 years .187 1.207 .024 .877 .787 1.366 .332 .564 1.630 1.424 1.310 .252 .135 1.545 .008 .930

10 -15 years .668 1.237 .292 .589 -.156 1.362 .013 .909 .672 1.440 .218 .641 -.332 1.544 .046 .830

20 - 25 years .881 1.321 .445 .505 1.321 1.406 .883 .347 2.561 1.494 2.938 .087 1.461 1.623 .810 .368

Over 25 years 0a . . . 0a . . . 0a . . . 0a . . .

Firm Age

(years)

5-10 1.318 .811 2.643 .104 -1.178 .853 1.909 .983 .972 3.623 .057

10-20 -.689 .924 .556 .456 -.794 .951 .697 .473 1.038 .336 .562

20-30 1.447 .930 2.420 .120 -1.155 .939 1.514 .342 1.027 2.369 .124

182

Model 1 Model 2 Model 3 Model 4

B SE Wald Sig B SE Wald Sig B SE Wald Sig B SE Wald Sig

30-40 .514 .703 .536 .464 .542 .725 .559 .756 .803 .050 .823

40-50 0a . . . 0a . . .232 . . .

Over 50 .

Firm Size (No of

employees)

.

0 – 250 2.736 1.722 174.33

1

.882 -1.704 1.782 148.28

0

.167 -9.610 2.027 93.603 .000

250 – 1,000 4.310 1.669 212.11

3

.677 -3.264 1.736 179.56

1

.404 -9.873 2.016 97.138 .000

1,000 – 5,000 -4.492 1.611 231.13

2

.333 -3.612 1.676 198.45

2

.218 -

10.502

1.941 111.53

8

.000

5,000 –10,000 -6.370 1.787 217.67

9

.453 -5.635 1.859 190.06

7

.454 -

10.202

2.200 92.863 .000

10,000 – 50,000 -2.482 2.246 100.20

7

.434 -1.813 2.356 85.691 .134 -

10.396

2.631 66.140 .000

50,000 – 100,000 -6.771 .000 . . -6.037 .000 . . -

11.344

.000 . .

Over 50,0000 . 0a . . . 0a . . .

Location

UK -1.085 .912 1.415 -.431 1.017 .180 .672

US .768 .831 .854 1.196 .924 1.673 .196

183

184

Model 1 Model 2 Model 3 Model 4

B SE Wald Sig B SE Wald Sig B SE Wald Sig B SE Wald Sig

Australasia -.817 .907 .811 .329 .998 .109 .742

EU -.655 .921 .507 .328 1.032 .101 .750

Africa 0a . . 0a . . .

Negelkerke R-

squared

0.151 0.293 0.355 0.671

Change in

Negelkerke R-

squared

0.142 0.062 0.316

Chi-Square 12.009 35.437 49.485 97.016

Change in Chi-

Square

23.428 14.048 47.531

-2 LL 146.958 161.608 158.708 127.177

N = 73, df =12 , p<.001 N = 73, df =22 , p<.001 N = 73, df =26 , p<.001 N = 73, df =42 , p<.001

Notes: B=beta coefficient and SE = standard error.

4.3.1 Summary of results for executive L & D effects on organisational

performance for the industry sector

Table 4.6 presents a high-level summary of the significant predictors of executive L

& D for organisational performance for the industry sector, with details of the beta

(B), standard estimate (SE), significance level (Sig: <.05) and odds ratio (OR) for

each variable.

Table 4.6: Summary of the significant predictors of executive L & D on

organisational performance for the industry sector.

Significant Predictors of Executive L & D on

Organisational Performance (Industry Sector) - N=73

Executive L &

D

B SE Wald Sig OR

(Exp B)

Participative

.783

185

.258 5.113 .024 2.19

Experiential .367

.312 1.386 .239 1.44

Structured .227

.229 .980 .322 1.25

Strategic .293 .323 .820 .365 1.34

Based on the Wald and significance level values, for the industry sector, participative

L & D (Wald: 5.113; p=.024) produced the most significant effect and strategic L &

D (Wald: .820; p=.365) generated the least effect on organisational performance.

Table 4.7: Comparison of results across sectors and confirmation of Hypothesis H2.

Significant Predictors of Executive L & D on

Organisational Performance (Service Sector)

- N=149

Significant Predictors of Executive L & D on

Organisational Performance (Industry

Sector) - N=73

Executive L

& D

Wald Sig Change

in Chi-

square

Models

3 & 4

Change

in R-

square

Models

3 & 4

Executive L

& D

Wald Sig Change

in Chi-

square

Models

3 & 4

Change

in R-

square

Models

3 & 4

Experiential 4.281 .039 Participative 5.113 .024

Strategic 3.546 .060

186

In accordance with the data analysis section (3.10.2), the differential effects of the

service versus industry sectors were evaluated, based on the values of the Chi-

squared and Pseudo R-squared statistical values in Model 4 (Table 4.7). In this

particular case, the predictive effects of executive L & D on organisational

performance were greater for the Industry sector (Negelkerke R-squared, .31; Chi-

square, 47.53; p< .050) than for the Service sector (Negelkerke R-squared, .19; Chi-

square, 30.72; p< .050). Hence, hypothesis H2, that executive L & D effects on

organisational performance will differ by sector (service and industry), is confirmed

in this research.

4.4 Results of the executive L & D effects on organisational performance (SME

firms, N=68)

Table 4.8 presents the ordinal regression results for the effects of executive L & D

on the composite organisational performance measure for SME firms. For each

regression model, the beta (B), standard estimate (SE), Chi-square, Wald and the

Negelkerke R-square are presented. In addition, the important odds ratio (OR), which

Experiential 1.386 .239

Structured 1.502 .220 Structured .980 .322

Participative .061 .805

0.19

30.72

0.31

47.53

Strategic .820 .365

187

is an exponential of the beta coefficient (Exp (B)), is computed for each executive L

& D variable.

In Model 1, marginal effects of the control variables – gender, title and executive

experience – were observed (Negelkerke R-squared, .124; Chi-square, 8.351; p<

.050). Model 2 produced further contributions over and above Model 1 (Negelkerke

R-squared, .165; Chi-square, 11.349; p< .050), suggesting that firm age and size

generated positive effects on organisational performance. Significant effects of

control variables related to executive title were observed.

Model 3 reported an improvement (Negelkerke R-squared, .251; Chi-squared,

18.133; p< .050) above Model 2. Model 4 reported a significant improvement over

and above Model 3 (Negelkerke R-squared, .432; Chi-square, 37.994; p< .050) and

only participative L & D (Beta: .751; OR: 2.12; Wald: 2.116; p=.035) generated

significant effects on the organisational performance measure. The odds ratio (2.12)

associated with participative L & D suggests that organisational performance for the

SME firms is likely to increase by 2.12 for each unit enhancement in the participative

L & D variable.

As depicted in Table 4.8, the other variables did not reach statistical significance at

p<.050: strategic L & D (Beta: .531; OR: 1.70; Wald: 1.287; p=.157), structured L

& D (Beta: .220; OR: 1.25; Wald: .243; p=.622) and experiential L & D (Beta:

.367; OR: 1.44; Wald: 1.386; p=.239).

Other control variables, such as gender and experience, produced no noticeable

effects on the predictability of executive L & D for organisational performance (see

Table 4.8).

Table 4.8: Ordinal Regression analysis results - Executive L & D effects on organisational performance (SME firms, N=68)

Model 1 Model 2 Model 3 Model 4

B SE Wal

d

Sig B SE Wal

d

Sig B SE Wal

d

Sig B SE Wal

d

Sig

Executive L & D

Strategic .531 .468 1.287 .157

Experiential .010 .484 .000 .984

Structured .220 .446 .243 .622

Participative .751 .517 2.116 .035

Gender

Male .352 .506 .485 .486 .159 .549 .084 .772 .500 .592 .712 .399 .095 .624 .023

Female 0a . . . 0a . . . 0a . . 0a . .

Title

CEO -.404 .748 .292 .772 -.404 .748 .292 .589 -.528 .812 .422 .516 -1.608 .885 3.298 .069

Top Level

Executive

-.432 .715 -.432 .365 -.222 .801 .077 .782 -.003 .839 .000 .997 -.718 .884 .660 .416

Senior Vice

President

-.100 .779 -.100 .056 .322 1.508 .046 .831 -.556 1.667 .111 .739 -2.250 1.787 1.584 .208

Vice President .351 1.458 .351 .058 .524 .758 .478 .489 .460 .796 .335 .563 -.282 .836 .114 .736

Director .523 .716 .523 .534 -.462 1.970 .055 .814 -.582 2.089 .078 .781 -1.462 2.357 .385 .535

Divisional -.375 1.934 -.375 .087 -.232 .904 .066 .798 -.184 .935 .039 .844 -1.072 1.009 1.128 .288

188

Model 1 Model 2 Model 3 Model 4

B SE Wal

d

Sig B SE Wal

d

Sig B SE Wal

d

Sig B SE Wal

d

Sig

Manager

Senior

Management

-.199 .871 -.199 .052 0a . . . 0a . . . 0a . . .

Middle

Management

0a . 0a .798

Executive

Experience

.

0 - 5 years -1.873 .814 5.300 .054 -1.773 .824 4.625 .052 -1.590 .875 3.299 .069 -1.175 .959 1.500 .221

5 - 10 years -1.339 .868 2.379 .123 -1.443 .898 2.579 .108 -1.126 .967 1.355 .244 .113 1.088 .011 .917

10 - 15 years -1.600 1.025 2.434 .119 -1.726 1.061 2.646 .104 -1.657 1.175 1.987 .159 -1.036 1.305 .631 .427

20 - 25 years -1.157 1.003 1.330 .249 -1.076 1.021 1.112 .292 -1.501 1.138 1.739 .187 -.658 1.230 .286 .593

Over 25 years 0a . . . 0a . . . 0a . . . 0a . . .

Firm Age

(years)

5-10 1.222 1.203 1.033 .309 1.415 1.235 1.312 .252 -1.175 .959 1.500 .666

10-20 .969 1.368 .502 .479 1.271 1.406 .817 .366 .113 1.088 .011 .584

20-30 .062 1.357 .002 .963 .365 1.420 .066 .797 -1.036 1.305 .631 .997

30-40 1.410 1.347 1.095 .295 1.861 1.377 1.828 .176 -.658 1.230 .286 .352

40-50 . 0a . . . 0a . . .

189

Model 1 Model 2 Model 3 Model 4

B SE Wal

d

Sig B SE Wal

d

Sig B SE Wal

d

Sig B SE Wal

d

Sig

Over 50

Firm Size (No of

employees)

0 – 250 0a . . 0a . . 0a . .

250 – 1,000

1,000 – 5,000 -.179 .800 .050 .823 .232 .879 .070 .792

5000 – 10,000 .814 .851 .913 .339 1.520 1.011 2.259 .133

10,000 – 50,000 .506 .887 .326 .568 .341 .959 .126 .722

50,000 – 100,000 -1.277 .806 2.511 .113 -.882 .905 .951 .330

Over 100,000 0a . . . 0a . . .

Location

UK -.179 .800 .050 .823 .232 .879 .070 .792

US .814 .851 .913 .339 1.520 1.011 2.259 .133

Australasia .506 .887 .326 .568 .341 .959 .126 .722

EU -1.277 .806 2.511 .113 -.882 .905 .951 .330

Africa 0a . . . 0a . . .

Negelkerke R-

squared

0.124 0.165 0.251 0.432

Change in 0.041 0.086 0.181

190

191

Model 1 Model 2 Model 3 Model 4

B SE Wal

d

Sig B SE Wal

d

Sig B SE Wal

d

Sig B SE Wal

d

Sig

Negelkerke R-

squared

Chi-Square 8.351 11.349 18.133 37.994

Change in Chi-

Square

2.998 6.784 19.861

-2 LL 106.767 167.364 163.353 146.265

N = 68, df =11 , p<.001 N = 68, df =16 , p<.001 N = 68, df =20 , p<.001 N = 68, df =24 , p<.001

Notes: B =beta coefficient and SE = standard error.

4.4.1 Summary of results for executive L & D effects on organisational

performance for the SME firms

Table 4.9 presents a high-level summary of the significant predictors of executive L

& D on organisational performance for SME firms, with details of the beta (B),

standard estimate (SE), significance level (Sig: <.05) and odds ratio (OR) for each

variable.

Table 4.9: Summary of the significant predictors of executive L & D on

organisational performance for SME firms

192

Significant Predictors of Executive L & D on

Organisational Performance (SME) - N=68

Executive L &

D

B SE Wald Sig OR

(Exp B)

Participative .751 .517 2.116 .035 2.12

Strategic .531 .468 1.287 .157 1.70

Structured .220 .446 .243 .622 1.25

Experiential .010 .484 .000 .984

1.01

Based on the Wald and Sig level values, for the SME firms, participative L & D

(Wald: 2.116; p=.035) produced the most significant effect and experiential L & D

(Wald: 0.000; p=.984) generated the least effect on organisational performance.

4.5 Results of the executive L & D effects on organisational

performance (Non-SME firms, N=154)

Table 4.10 presents the ordinal regression results for the effects of executive L & D

on the composite organisational performance measure for non-SME firms. For each

regression model, the beta (B), standard estimate (SE), Chi-square, Wald and the

Negelkerke R-square are presented. In addition, the important odds ratio (OR), which

is an exponential of the beta coefficient (Exp (B)), is computed for each executive L

& D variable.

193

In Model 1, marginal effects of the control variables – gender, title and executive

experience – were observed (Negelkerke R-squared, .103; Chi-square, 15.717; p<

.050). Model 2 produced further contributions over and above Model 1 (Negelkerke

R-squared, .129; Chi-square, 19.967; p< .050), suggesting that firm age and size

generated positive effects on organisational performance. Significant effects of

control variables related to executive title were observed. In Model 2, executive

experience of 20-25 years was more likely to predict higher organisational

performance that other periods of experience (Beta: .986; Wald: 4.999; p=.025).

Model 3 reported an improvement (Negelkerke R-squared, .251; Chi-square, 18.133;

p< .050) above Model 2. However, the previous observation in Model 2 (that

executives with 20-25 years’ experience were more likely to predict higher

organisational performance compared to their peers) was dissipated in Model 3

(Beta: 2 .086; Wald: 3.083; p=.056).

Model 4 reports a significant improvement over and above Model 3 (Negelkerke R-

squared, .432; Chi-square, 37.994; p< .050). Three variables of executive L & D

generated significant effects on the organisational performance measure, in the

following order of magnitude: experiential L & D (Beta: .539; OR: 1.71; Wald:

9.225; p=.002), strategic L & D (Beta: .554; OR: 1.71; Wald: 4.358; p=.037),

structured L & D (Beta: .797; OR: 2.22; Wald: 3.469; p=.043). The odds ratio

(1.74) associated with experiential L & D suggests that organisational performance

for the non-SME firms is likely to increase by 1.74, for each unit enhancement in the

experiential L & D variable. Similarly, the odds ratio (1.71) associated with strategic

L & D suggests that organisational performance for the non-SME firms is likely to

increase by 1.71, for each unit enhancement in the strategic L & D variable. The

odds ratio (1.74) associated with structured L & D suggests that organisational

performance for the non-SME firms is likely to increase by 1.74, for each unit

enhancement in the structured L & D variable. However, participative L & D failed

to reach statistical significance as a predictor of organisational performance in the

non-SME firms (Beta: .156; OR: 1.17; Wald: .358; p=.550).

194

Other control variables, particularly gender, produced no noticeable effects on the

predictability of executive L & D for organisational performance (see Table 4.10).

Table 4.10: Ordinal Regression analysis results – Executive L & D effects on organisational performance (Non-SME firms, N=154).

Model 1 Model 2 Model 3 Model 4

B SE Wald Sig B SE Wal

d

Sig B SE Wal

d

Sig B SE Wal

d

Sig

Executive L & D

Strategic .554 .265 4.358 .037

Experiential .797 .262 9.225 .002

Structured .422 .227 3.469 .043

Participative .156 .260 .358 .550

Gender

Male .910 1.348 .455 .500 1.158 1.375 .709 .400 1.270 1.419 .801 .371 1.063 1.464 .527 .468

Female .475 1.356 .122 .726 .615 1.375 .200 .655 .911 1.415 .414 .520 .948 1.455 .424 .515

Title

CEO .401 .784 .261 .609 .224 .799 .078 .780 .071 .815 .008 .931 -.591 .858 .475 .491

Top Level

Executive

-.342 .643 .282 .595 -.159 .662 .058 .810 -.262 .675 .151 .698 .298 .727 .169 .681

Senior Vice

President

.239 .653 .134 .715 .211 .665 .101 .751 -.044 .678 .004 .948 -.127 .708 .032 .858

Vice President .671 .599 1.255 .263 .880 .618 2.026 .155 .961 .637 2.276 .131 .982 .675 2.117 .146

Director -.586 .473 1.532 .216 -.560 .482 1.353 .245 -.685 .493 1.930 .165 -.646 .518 1.555 .212

195

Model 1 Model 2 Model 3 Model 4

B SE Wald Sig B SE Wal

d

Sig B SE Wal

d

Sig B SE Wal

d

Sig

Divisional

Manager

-.689 .560 1.515 .218 -.726 .566 1.643 .200 -.717 .582 1.519 .218 .045 .613 .005 .942

Senior

Management

.525 .435 1.458 .227 .573 .446 1.650 .199 .542 .450 1.450 .229 .571 .477 1.432 .231

Middle

Management

0a . . . 0a . . . 0a . . . 0a . . .

Executive

Experience

0 - 5 years .851 .753 1.276 .259 1.027 .776 1.753 .185 1.263 .811 2.423 .120 .764 .855 .800 .371

5 -10 years .684 .761 .808 .369 .988 .792 1.558 .212 1.276 .823 2.406 .121 .436 .864 .255 .614

10 -15 years .934 .771 1.466 .226 1.083 .795 1.857 .173 1.631 .839 3.780 .052 1.029 .882 1.360 .243

20 -25 years 1.716 .939 3.336 .068 2.205 .986 4.999 .025 2.086 1.008 3.083 .056 1.382 1.060 1.700 .192

Over 25 years 0a . . . 0a . . . 0a . . . 0a . . .

Firm Age

(years)

5-10 -.736 1.941 .144 .705 .141 1.973 .005 .943 1.962 2.050 .916 .338

10-20 -1.261 1.923 .430 .512 -.485 1.958 .061 .804 1.420 2.050 .480 .489

20-30 -1.377 1.916 .516 .472 -.875 1.938 .204 .652 1.354 2.019 .450 .503

196

Model 1 Model 2 Model 3 Model 4

B SE Wald Sig B SE Wal

d

Sig B SE Wal

d

Sig B SE Wal

d

Sig

30-40 -.830 1.895 .192 .661 .059 1.920 .001 .976 1.680 1.990 .713 .399

40-50 -.846 1.882 .202 .653 -.089 1.900 .002 .963 1.389 1.969 .498 .480

Over 50 0a . . . 0a . . . 0a . . .

Firm Size (No of

employees)

0 – 250 .499 .333 2.253

.133

.482 .336 2.052 .152 .322 .359 .803

.370

250 – 1,000 0a . . 0a . . 0a . .

1,000 – 5,000

5,000 – 10,000 -.660 .518 1.623 .203 -.513 .565 .825 .364

10,000 – 50,000 .398 .487 .667 .414 .206 .532 .150 .698

50,000 – 100,000 -.843 .591 2.034 .154 -.674 .633 1.130 .288

Over 100,000 .559 .540 1.071 .301 .651 .584 1.243 .265

Africa 0a . . . 0a . . .

Negelkerke R-

squared

0.103 0.129 0.193 0.513

Change in

Negelkerke R-

0.026 0.064 0.32

197

198

Model 1 Model 2 Model 3 Model 4

B SE Wald Sig B SE Wal

d

Sig B SE Wal

d

Sig B SE Wal

d

Sig

squared

Chi-Square 15.717 19.967 31.072 102.161

Change in Chi-

Square

4.25 11.105 71.089

-2 LL 276.432 395.920 404.095 345.718

N = 154, df =13 , p<.001 N = 154, df =19 , p<.001 N = 154, df =23 , p<.001 N = 154, df =27 , p<.001

Notes: B = beta coefficient and SE = standard error.

4.5.1 Summary of results for executive L & D effects on organisational

performance for the non-SME firms

Table 4.11 presents a high-level summary of the significant predictors of executive L

& D on organisational performance for the non-SME firms, with details of the beta

(B), standard estimate (SE), significance level (Sig: <.05) and odds ratio (OR) for

each variable.

Table 4.11: Summary of the significant predictors of executive L & D on

organisational performance for non-SME firms.

Significant Predictors of Executive L & D on

Organisational Performance (Non-SME) - N=154

B SE Wald Sig OR

(Exp B)

Experiential .554 .265 9.225 .002 1.74

Strategic .554 .265 4.358 .037 1.74

Structured .797 .262 3.469 .043 2.22

Participative .156 .260 .358 .550 1.17

Based on the Wald and significance level values, for the non-SME firms, experiential

L & D (Wald: 9.225; p=.002) produced the most significant effect and participative

L & D (Wald: .358; p=.550) generated the least effect on organisational

performance.

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Table 4.12: Comparison of results across firm size and confirmation of Hypothesis

H3.

In accordance with the data analysis section (3.10.3), the differential effects for

SMEs versus non-SMEs were evaluated, based on the values of the Chi-square and

pseudo R-squared statistical values in Model 4 (Table 4.12). In this particular case,

the predictive effects of executive L & D on organisational performance were greater

for non-SMEs (Negelkerke R-squared, .32; Chi-square, 71.09; p< .050), compared

to SMEs (Negelkerke R-squared, .18; Chi-square, 19.86; p< .050). Hence,

hypothesis H3, that executive L & D effects on organisational performance will

differ by firm size (SME / non-SME), is confirmed in this research.

Significant Predictors of Executive L & D on

Organisational Performance (SME) –

N=68

Significant Predictors of Executive L & D on

Organisational Performance (Non-SME) -

N=154

Executive L

& D

Wald Sig Change

in Chi-

square

Models

3 & 4

Change

in R-

square

Models

3 & 4

Executive L

& D

Wald Sig Change

in Chi-

square

Models

3 & 4

Change

in R-

square

Models

3 & 4

Participative 2.116 .035 Experiential 9.225

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4.6 Conclusions and summary of hypotheses

The purpose of this chapter was to present the quantitative research results of the

present study. The chapter first explored the data set and the properties of the scales

used. The relationships between variables were examined through ordinal regression

analysis models. In terms of the control variables, no statistically significant

differences were observed across gender and no geographical location differences

emerged. The results confirm that all three hypotheses – H1, H2 and H3 – are valid;

a summary of the hypotheses is presented in Table 4.13.

.002

Strategic 1.287 .157 Strategic 4.358 .037

Structured .243 .622 Structured 3.469 .043

Experiential .000 .984

0.18

19.86

0.32

Participative .358 .550

71.09

Table 4.13: Summary of results for Hypotheses H1, H2 and H3.

Hypothesis Description Results

H1 Executive L & D will generate positive

effects on organisational performance

supported

H2 Executive L & D effects on organisational

performance will differ by industry sector

(service and industry)

supported

H3 Executive L & D effects on organisational

performance will differ by firm size (SME /

non-SME)

supported

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Chapter Five: Discussion

5.0 Introduction

In this chapter, the discussion concerns the results, findings, and conclusions

emerging from the hypotheses tested in Chapter Four; it is organised in three main

parts. Part One is dedicated to discussion of the results related to the effects of

executive learning and development on organisational performance. Part Two

discusses the impact of firm sector as a moderator. Finally, the impact of firm size as

a moderator is discussed in Part Three.

5.1 Part One: Discussion of Results – Executive L & D effects on

organisational performance (Total Sample, N=222)

In this research, executive learning and development is specified as a four-

dimensional, 14 item measure, underpinned by exploratory, confirmatory and

discriminant validation of two different samples of executives (N=150 and N=222).

The measure encompassed the strategic, experiential, structured and participative

domains of learning and development. In addition, the dependent variables utilised

consisted of composite organisational performance measures (finance, market share,

innovation, employee engagement and customer service), reflecting wider

stakeholder goals.

The hypothesised link between executive learning and development, and

organisational performance, was grounded on a number of inter-related theoretical

underpinnings: the resource-based view (RBV), and human capital, dynamic

capability and resource dependency theories. Based on ordinal regression analysis,

hypothesis H1, that executive L & D will generate positive effects for organisational

performance, is confirmed. This outcome was based on the observation of the change

in magnitude of model fit parameters (pseudo R-squared and Chi-square), as well as

significant levels of specific executive learning and development measures.

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The results support the notion cited in the literature review that the human capital

theory offers theoretical justification for the link between executive L & D and

organisational performance (Rastogi, 2002; Mayo, 2001). The observed effects of

executive L & D on organisational performance can be explained through theories of

social capital (Nahapiet and Ghoshal, 1998) and job demand resource (Demerouti et

al., 2001a, 2001b). As executives engage in learning and development (situated

within their internal and external networks), they gain greater access to new

resources (Sparrowe et al., 2001), which can be deployed to offer better support and

resources to subordinates (Edmondson, 1999; Van Der Vegt and Bunderson, 2005;

Van Emmerik et al., 2011). As employees gain better support and resources from

executives, they generate creative solutions and products (Shore and Coyle-Shapiro,

2003; Shore et al., 2005; Yukl et al., 2009) leading to greater customer satisfaction

(Babbar and Koufteros, 2008; Maddern et al., 2007) and enhanced organisational

performance effects.

Empirically, several researchers have reported positive effects of training and

development (considered to be a source of human capital) for organisational

performance (e.g. Bae and Lawler, 2000; Bae et al., 2003; Carlson et al., 2006; Fey

and Bjorkman, 2001; Harel and Tzafrir, 1999; Katou and Budhwar, 2006; Laursen

and Foss, 2003; Panayotopoulou et al., 2003; Richard and Johnson, 2001; Rodwell

and Teo, 2005; Rodriguez and Ventura, 2003; Sels et al., 2006; Tessema and Soeters,

2006; Tzafrir, 2005). More specifically, Hitt et al. (2001) found direct and

moderating effects of human capital with strategies (i.e. service diversification and

geographic diversification) on organisational performance in professional service

firms.

Furthermore, the results confirm the link between the resource-based view and

organisational performance (Barney and Arikan, 2001; Barney, 2001). The resource-

based view posits that executive skills embody a high degree of inimitability and

constitute a crucial component of organisational human capital and tacit knowledge

(Barney, 1991; Barney and Arikan, 2001; Barney, 2001; Castanias and Helfat, 2001).

Hence, the effective deployment of the tacit ‘knowledge’ resources derived from

executive learning and development can increase firm effectiveness in ways that

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competitors are unable to replicate, thereby providing economic rent (competitive

advantage). Several researchers have conducted empirical testing of the resource-

based view in the last two decades, with positive results. For example, Henderson

and Cockburn (1994) measure the value, rarity and imitability of competence, which

impact on research productivity in pharmaceutical firms. In the context of Spanish

manufacturing firms (over 10 employees), Esteve-Perez and Manez-Castillejo (2008)

confirm that the firm’s strategy that develops specific assets (e.g. advertising, and

creating research and development policy) could enhance its ability to adapt to the

environment, and improve its survival prospects. Ray et al. (2004) observed that

intangible and socially complex capabilities contribute to customer service

performance. More importantly, Newbert (2007) reported that the enhancement of

core competence contributes to competitive advantage and firm performance.

In addition, the results confirm the notion that executive L & D as a dynamic

capability generates organisational performance effects. It has been noted in the

literature review that learning mechanisms enhance dynamic capabilities and shed

light on the evolution of dynamic capability within organisations (Zott, 2003; Zollo

and Winter, 2002). Moreover, a definition of executive learning and development

cited this as a source of dynamic capability (Espedal, 2005). Drawing on the

knowledge-based view (e.g. Griffith et al., 2006; Liao et al., 2009), it was

conjectured that knowledge resources can generate dynamic capabilities, and that

learning serves as the bridge between knowledge resources and the creation of

dynamic capabilities (Van der Heijden, 2004). The SECI model (Nonaka and

Takeuchi, 1995) was postulated as the process of converting the knowledge

resources of executive L & D into organisation performance, moving through the

four non-linear steps of socialisation, externalisation, combination and internalisation

(SECI), to synthesise individual learning into objective and socially shared

knowledge across the organisation (Nonaka et al., 2001).

Moreover, the results confirm the notion that there is a link between resource

dependency and organisational performance. As discussed in the literature review,

directors can provide critical links to resources that a firm needs to survive and

prosper (Pfeffer and Salancik, 1978). Combining the resource dependency and the

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knowledge view of the firm, it can be argued that organisations capable of acquiring

critical operational knowledge faster than competitors can achieve a competitive

advantage (Chen and Lin, 2004; Zahra and George, 2002). Consequently, as

executives become adept at acquiring and combining knowledge from external

sources through informal and formal learning, they will create an enabling

environment for the production of innovative services and products, which can

generate positive organisational performance effects (Hsiao et al., 2011). From the

organisational knowledge creation perspective, the conversion process between tacit

(individual) and explicit knowledge (Nonaka and Takeuchi, 1995), based on

socialisation, externalisation, combination and internalisation (SECI), synthesises

individual learning into objective and socially shared knowledge (Nonaka et al.,

2001). This creates a knowledge spiral across the organisation, which can be applied

to generate innovative services and products (Wang and Ahmed, 2002; Narver et al.,

2004; Mavondo et al., 2005).

Empirical evidence supporting the notion that dimensions of learning and

development significantly affect organisational performance is documented by a

number of configurational SHRM theorists (e.g. Bae and Lawler, 2000; Bae et al.,

2003; Carlson et al., 2006; Fey and Bjorkman, 2001; Harel and Tzafrir, 1999; Katou

and Budhwar, 2006; Laursen and Foss, 2003; Panayotopoulou et al., 2003; Richard

and Johnson, 2001; Rodwell and Teo, 2005; Rodriguez and Ventura, 2003; Sels et

al., 2006; Tessema and Soeters, 2006; Tzafrir, 2005). Consequently, this observation

served as an important basis for undertaking further research to examine the effects

of executive learning and development on organisational performance measures.

The results of this study also lend support to previous empirical evidence reporting

positive effects of ambidextrous learning on organisational performance (Prieto et

al., 2009; Uotila et al., 2009; Bodwell and Chermack, 2010; Luzon and Pasola, 2011;

Lee and Huang, 2012). This is because the four-dimensioned executive learning and

development measure utilised in this research covered a broad range of formal and

informal learning and development indicators.

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Among all the predictors of executive learning and development, the strategic

dimension, in particular, produced the greatest impact, given that it was associated

with market share, customer satisfaction and innovation performance measures. It

can be recalled that strategic learning and development is an amalgamation of four

indicators: strategising (taking into account ethical, holistic, current and future

implications); maintaining awareness of business environment changes and their

implications on the organisation; maintaining close links with customers in order to

understand, attract and satisfy them more effectively than competitors (resulting in

the creation of differentiated, high added-value products and services); and

embedding new initiatives and changes by taking account of inter-functional and

cross-organisational impact and effects).

This outcome highlights the significance of strategic learning and development, and

underpins the need for executives to maintain closer contact with customers and to

maintain awareness of the competitive landscape, in order to understand customer

requirements. This will in turn enable executives to allocate appropriate resources

across their organisation to create superior products and services, which are likely to

enhance customer experience and satisfaction (Babbar and Koufteros, 2008;

Maddern et al., 2007).

The positive effects of strategic learning and development on performance

corroborate the results of previous research (e.g. Buzzell and Gale, 1987; Chang and

Singh, 2000; Laverty, 2001; Goddard et al., 2005). It has been theorised that

profitability is enhanced through learning effects (Al-wugavan et al., 2008; Besanko

et al., 2005; Liu and Yang, 2009). It is also expected that organisations focusing on

market-driven learning will tend to generate new products, which will enhance both

competitive advantage and market share (Sinkula et al., 1997; Li et al., 1999).

According to Sinkula (1994), market-driven learning entails the development of

market knowledge, which potentially influences organisational performance. It is

expected that developing new products is likely to result in greater customer

satisfaction, which will in turn generate customer loyalty for an organisation (Jones

and Suh, 2000; Bennett and Rundle-Thiele, 2004; Keiningham et al., 2003; Yeung et

al., 2002), leading to greater market share performance. On the other hand,

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dissatisfied customers might be inclined to transact business with competitors

(Barlow and Mail, 2000), resulting in shrinking market share performance for

affected organisations. Therefore, based on the foregoing theorisations, the link

between strategic learning and development and performance is confirmed,

especially as the indicators of strategic learning and development include items

related to gaining insight from customers and the wider competitive landscape

(market-driven), in order to develop superior products and services.

The positive effects of strategic learning and development on organisational

performance corroborate previous observations by Carmeli and Tishler (2006), who

report positive effects of managerial skills on market share change. These observed

positive effects of strategic learning and development could be explained by Bandy’s

(2003) service synergy model and knowledge management theory. According to the

service synergy model, there is a theoretical link between strategic knowledge assets,

business processes and the capacity to generate exceptional customer service

performance (Bandy, 2003). Thus, the positive effects of strategic learning and

development on organisational performance may be explained as follows. As

executives interact more frequently with customers and intensify their knowledge of

the external business environment, they acquire tacit knowledge (Guchait et al.,

2011). Tacit knowledge, according to Nonaka (1994), is deeply rooted in individual

action, commitment, and involvement in specific circumstances. Herrgard (2000)

defines tacit knowledge as the unarticulated knowledge acquired through individual

processes such as experience, reflection, internalisation, or individual talents. In

other words, the strategic learning and development arising from customer

interactions enable executives to acquire tacit knowledge, which can be exploited

within the organisation (with executive peers and employees) to develop superior

services and products and, therefore, superior customer satisfaction performance

(Tzokas and Saren, 2004; Babbar and Koufteros, 2008; Maddern et al., 2007;

Tontini and Silveira, 2007). Previous studies have confirmed the impact of

knowledge management practices on customer satisfaction and organisational

performance exemplified by the development of strong customer relationships

(Marques and Simon, 2006; Pathirage et al., 2007). Thus, based on Bandy’s (2003)

service synergy model and the knowledge management theory, the strategic learning

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and development effect on customer satisfaction performance reported in this

research has theoretical support.

The positive effects of strategic learning and development on customer satisfaction

might also be attributable to the effects of double-loop learning generated as

executives produce solutions to problems identified through close customer

interactions (Argyris and Schon, 1978, 1996). This knowledge can be diffused across

organisational functions (Mezias and Starbuck, 2003), enabling employees to

become more adept at responding rapidly to customer needs, leading to enhanced

customer satisfaction and performance effects (García-Morales et al., 2009).

In addition, the positive effects of strategic learning and development on

organisational performance can be explained through the SECI model of knowledge

creation (Nonaka and Takeuchi, 1995). As executives generate knowledge by

engaging in socialisation and interaction with customers, the resulting knowledge can

be combined with competitor insights (tacit knowledge) at the individual level. Such

tacit knowledge can subsequently be externalised through dialogue (with peers and

employees) resulting in the creation of explicit knowledge (Ambrosini and Bowman,

2001). The resulting explicit knowledge can then be shared or diffused within the

organisation. At this point, employees can internalise and experiment with the

knowledge to develop innovative solutions and products (Byosiere and Luethge,

2008), resulting in superior innovation performance (Tontini and Silveira, 2007).

The effects of participative learning and development on organisational performance

may be explained through the social capital (Nahapiet and Ghoshal, 1998) and job

demand resource theories (Demerouti et al., 2001a, 2001b), as follows. According to

social capital theory, networks of relationships generate valuable resources, and

provide members with ‘collectively-owned capital’, which can be exploited for

organisational benefits (Nahapiet and Ghoshal, 1998). Adler and Kwon (2002) posit

that the presence of higher-level social capital is likely to enhance team-learning

behaviours. As executives engage in participative learning and development (situated

within their network), they gain greater access to new resources in terms of

information and guidance related to the effective performance of their work

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(Sparrowe et al., 2001). Executives can then deploy the social capital gained through

participative learning and development to offer better support and resources to

subordinates (Edmondson, 1999; Van Der Vegt and Bunderson, 2005; Van Emmerik

et al., 2011). As employees benefit from the better support and resources from

executives, they can employ it to generate creative solutions and products (Wang et

al., 2005; Yukl et al., 2009), which can result in greater customer satisfaction

(Babbar and Koufteros, 2008; Maddern et al., 2007) and eventually translate to

organisational performance (Shore and Coyle-Shapiro, 2003).

In this research, experiential learning and development generated positive effects on

performance, and there is theoretical support for this. Experiential learning and

development, in this study, is an amalgamation of four indicators: 1) risk taking,

venturing into unknown territories and experimenting with new ideas to drive

efficiencies in processes and cost reduction; 2) amending established organisational

practices in pursuit of greater efficiency and effectiveness; 3) learning quickly from

past experiences, thus permitting growth, change, adaptation, and creative problem-

solving; and 4) participating in cross-functional activities and stretch assignments,

such as organisational restructuring, strategic initiatives, merger integrations,

acquisitions targeting, to broaden job scope and competencies. The impact of

experiential learning and development on innovation performance may be attributed

to the effects of organisational knowledge creation processes (Grant, 1996;

Leiponen, 2006; Taminiau et al., 2009) and the leader-member exchange (Dansereau

et al., 1975; Graen and Cashman, 1975).

The organisational knowledge creation view of the firm, involving the conversion

processes between tacit (individual) and explicit knowledge (Nonaka and Takeuchi,

1995) based on the socialisation, externalisation, combination and internalisation

(SECI) model, helps to synthesise individual learning into objective and socially

shared knowledge across the organisation (Nonaka et al., 2001). Thus, as executives

enhance their capabilities through experiential learning, the acquired knowledge can

be converted into shared-knowledge through dialogue with peers and subordinates.

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The leader exchange process further explains the connection between experiential

executive learning and development, and performance. Employees are likely to

receive increased support and guidance from executives because of the greater self-

awareness derived from experiential learning and development processes. As a

result, employees are likely to reciprocate with greater motivation and

experimentation of new ideas thereby, creating channels for more innovative services

and products (Nasution and Mavondo 2008). This line of thought has empirical

support, as Liao et al. (2010) recently found a statistically significant relationship

between leader-member exchange and employee creativity. Experience-based

knowledge is considered important in the development of tacit knowledge, which in

turn, drives innovative and competitive advantage (Byosiere and Luethge, 2008).

This view corroborates the findings of this research.

In addition, some researchers (e.g. Ju et al., 2006; Zhang et al., 2004), have

suggested that knowledge and learning are instrumental in determining innovative

capabilities at the individual and organisational levels, and such innovative

capabilities can influence organisational stability in dynamic markets (Lee and Tsai,

2005). This view is supported by the outcome of this research. The results from this

research also lend support for the knowledge-based theory (Huang and Newell, 2003;

McEvily and Chakravarthy, 2002; Wang et al., 2004) that organisational knowledge

assets developed through learning and development generate positive firm

performance (e.g. Rosenkopf and Almeida, 2003; Agrawal et al., 2009; Tzabbar,

2009).

In this research, participative learning and development was found to generate

positive effects on organisational performance. This outcome may be explained by

the leader-member exchange (Dansereau et al., 1975; Graen and Cashman, 1975).

Based on social exchange, and leader-member exchange, theory, it can be argued that

effective executive learning and development can generate increased employee

commitment, and hence result in organisational performance effects. Thus, by

engaging in participative learning and development activities, executives can

increase the capacity to provide employees with access to a wide range of resources

and support. As employees recognise the value of new resources and support, they

210

are likely to reciprocate through higher levels of commitment (Colquitt et al., 2005)

and better performance (Coyle-Shapiro and Shore, 2007; Lee, 2008; Tse and Lam,

2008), resulting in positive effects for employee engagement performance. The

reverse is likely to hold true, in that employees might perceive inferior resources and

minimal support from executives as justification to reciprocate with lower levels of

commitment, which would therefore lead to lower employee engagement.

The effects on performance of structured executive learning and development

through education have been emphasised by Djellal and Gallouj (2007), and this is

replicated in this research. The results suggest that the human capital originating

from external sources (such as the market, universities and research centres) and

other sources (conferences, fairs, exhibitions, magazines, and associations) impacts

on organisational performance. This outcome supports the call for an integrated

measure of executive L & D, encapsulating both formal and informal dimensions.

Finally, indicators of strategic, experiential and participative learning and

development closely reflect informal learning practices, and this confirms early

predictions that executives are more likely to engage in informal, rather than in

formal and structured, learning (Brown, 2006). Specifically, Brown (2006) reports

that senior managers in the UK have developed a strong preference for informal

development mechanisms such as networking with peers, group problem solving,

presentations/lectures and coaching. This outcome also corroborates previous studies

reporting positive effects of informal learning on organisational performance (e.g.

Thach, 2002; Peterson and Millier, 2005). Thach (2002) reported a 60 per cent

increase in perceived managerial effectiveness following the incidence of executive

coaching. Peterson and Millier (2005) also cited the positive influence of coaching

on middle and executive managerial performance, leading to a positive return on

investment by the sampled organisation.

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5.2 Part Two: Discussion of Results Related to Sector Differences

(Service versus Industry)

The view that learning orientation is likely to differ across industrial sectors (e.g.

Hyland et al., 2000; Dymock and McCarthy, 2006: Khadra and Rawabdeh, 2006),

discussed in the literature review chapter, is confirmed in this research. Based on a

study examining the learning orientations of 300 manufacturing and service firms,

Sadler-Smith et al. (2001) suggested that manufacturing firms were more likely to

advance an active-learning orientation, compared with their service counterparts. In

contrast, some researchers (e.g. Lien et al., 2006; Bhatnagar, 2006) consider learning

orientation to be far more crucial to the operation of service firms. Although the

above-mentioned studies report statistically significant differences between

manufacturing and service firms with respect to learning orientation, this outcome is

not universally supported, given that others (e.g. Jamali et al., 2009; Comb et al.,

2006) observed no variance in the learning orientation between service and

manufacturing firms.

In this study, statistically significant differences in learning orientation, as well as the

performance effects of the learning and development indicators between the service

and industry sectors, were observed. The overall model fit for the industry sector was

much better, compared with the service sector. This is an indication that the

predictive effect of executive learning and development on organisational

performance was better for the industry sector than for the service sector.

The observed superior organisational performance impact of executive learning and

development in the industry sector might be attributable to the adaptation of the

service logic by industry firms, which drives executives’ learning orientation towards

delivering better customer satisfaction, which, in turn, drives organisational

performance (Vargo and Lusch, 2006). As indicated by Vargo and Lusch (2006),

many manufacturing firms have found a competitive advantage through the adoption

of a service-dominated orientation, but many firms typically characterised as service

212

organisations have found themselves at a competitive disadvantage by adopting a

logic focusing on output management.

The differential predictors of executive learning and development on performance

may be attributed to the unique characteristics of services (intangibility,

heterogeneity, perishability and simultaneity of production and consumption), which

differentiate them from physical products, thus limiting the replication of innovation

models across sectors (Sundbo, 1997, 2009; Tether and Hipp, 2002; Tether, 2005).

The results shown in Table 4.4 suggest that service organisations are likely to draw

upon experiential and strategic executive learning and development to drive

organisational performance. For example, Sundbo (1997, 2009) stresses that

organisational learning and experience is an important source of information for

generating innovation in the service sector. This view confirms the positive effects

of experiential learning and development on service firms observed in this research.

Furthermore, customers, competitors and market dynamics effects have been found

to be among the important success factors for innovation and organisational

performance in the service industries (Vargo and Lusch 2006; Lusch et al., 2007;

Pires et al., 2008). Thus, service organisations interested in driving superior

performance will have to devote more resources towards the dimensions of

experiential and strategic learning and development, to develop the capacity within

their organisation to differentiate their services from competitors.

In terms of the industry sector, participative and experiential executive learning and

development predicted the highest organisational performance effects, highlighting

the importance of these dimensions to this particular sector. Thus, service

organisations seeking to maximise innovation performance through executive

learning and development need to engage in multiple dimensions in order to become

effective at service innovation.

Based on the above discussion, the hypothesis H3, that the effects of executive

learning and development on organisational performance will differ by service and

industry sectors, is fully supported.

213

Differences in the learning orientation and performance effects of executive learning

and development by sector might relate to the dissimilar attribution of value

propositions across sectors. For example, whilst industry sector firms generate value

by producing tangible innovative products that are delivered to the customer, in the

service sector, greater integration of customer experiences may be required to create

value (Firat and Venkatesh, 1995). This could require greater executive proximity to

customers to understand their unique preferences in the service sector, compared to

the industry sector. As a result, the capacity of executives in the service sector to

engage in other forms of learning and development situated in the wider competitive

environment might be limited, as they focus more effort in driving greater value to

customers through co-created value configurations.

The above outcome highlighting the different predictors of executive learning and

development across sectors is supported elsewhere. Thompson et al. (2001) found

that, in contrast to manufacturing firms where organisational learning enabled the

production of tangible goods, the learning emerging from service firms might be

construed as an integral part of the unique service value proposition delivery process.

Whilst the variable performance effects of executive learning and development

across service and industry can be considered in isolation, there may be other factors

contributing to this phenomenon, outside the scope of this study. According to

empirical research exploring profitability decomposition, there is evidence of

considerable and persistent intra-industry and inter-firm differences in profitability

growth. Generally, such investigations have focused on whether the sources of

profitability lie at the industry or the firm level (e.g. Schmalensee, 1985; Wernerfelt

and Montgomery, 1988; Powell, 1996), with results indicating that roughly 20% of

the variance in firm performance is attributable to industry factors, and the residual

variances are attributable to firm level dynamics and effective deployment of

resources.

Building on this discourse, Rumelt (1991) decomposed the variation in business unit

profitability into ‘stable industry’ and ‘stable business unit’ effects, based on the

same data source utilised by Schmalensee (1985) and Wernerfelt and Montgomery

214

(1988), and observed that long-term industry effects accounted for only 8% of the

observed variance, but that stable business unit effects contributed 46%.

Subsequently, McGahan and Porter (1997) took into account both manufacturing and

service industries in a study, and reported that industry factors account for 19% of

variance in profitability at the firm level. In principle, whilst acknowledging the

industry influences on organisational performance, this evidence is far stronger for

effective deployment of resources, which include executive capabilities. Therefore, it

can be conjectured that the results obtained, depicting the superior performance of

the industry sector, are not solely due to industry dynamics, but might be a reflection

of the effective deployment of executive learning and development dimensions in

this sector, compared to the service sector.

Accordingly, the view held by strategic management researchers, that profitability

stems from resources, capabilities and initiatives unique to firms (Barney, 1991;

Teece et al., 1997; Teece 2007; Winter, 2003) is supported in this research. In other

words, the resource-based approach (postulating that firm profitability is not so much

determined by ‘industry factors’, but rather stems from firms’ ability to develop

unique competences and capabilities to drive cost reduction, high-quality services

and products better than competitors) is validated in this study (Teece et al., 1997).

As indicated in the literature review chapter, the dynamic capability theory offers

support for the notion that executive learning and development can generate unique

sources of sustained competitive advantage, which may be firm-specific and difficult

to imitate (Nelson, 1995; Teece, 2007).

215

5.3 Part Three: Discussion of Results Related to Firm Size

Differences

Overall, the hypothesis that the organisational performance effects of executive

learning and development will vary by firm size (SMEs versus non-SMEs) is

supported in this study. It is, therefore, reasonable to suggest that the results reflect

the ramifications of the resource-based view and resource dependency theories. This

outcome corroborates previous research related to innovation differences by firm

size, where the performance of SMEs lagged behind larger firms, due to limited

financial resources and the inability to recruit specialised staff (e.g. Vossen, 1998).

In terms of organisational performance, the model for the non-SMEs exhibited

superior fit compared to the SME firms, suggesting that the predictive effects of

executive learning and development on performance were comparably better for non-

SMEs than for SME firms. Furthermore, whilst only participative executive learning

and development statistically predicted effects on organisational performance for the

SMEs (that is, variables approached statistical significance), for their non-SME

counterparts, experiential, structured and strategic learning and development attained

statistical significance. Hence, the differential performance effects of executive

learning and development by firm size were established mainly on the superior

model fit observed for the non-SME firms.

The predictive effects of executive learning and development on organisational

performance were comparably better for non-SME firms. Furthermore, strategic and

experiential learning and development exhibited positive significance as predictors of

market share performance for non-SMEs, contrasting with the SMEs, where only

participative learning and development exhibited significance as a predictor of

market share performance.

In essence, this result suggests that SMEs are more likely to drive organisational

performance through greater participative executive learning and development,

whilst non-SME firms are expected to rely on experiential, strategic and structured

executive learning and development to drive superior performance effects.

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The observed differential effects of the executive learning dimensions for SMEs (as

against non-SMEs) could be attributed to factors relating to firm size in the

adaptation and implementation of knowledge management processes arising from the

learning and development dimensions (Desouza and Awazu, 2006; Wong and

Aspinwall, 2005). SMEs have special characteristics (management structure,

systems and procedures) that differentiate them from non-SMEs, and such unique

characteristics are likely to influence all activities in the life cycle of knowledge –

from acquisition, organisation, storage, dissemination/transfer, to effective

application in order to generate intended organisational outcomes (Supyuenyong et

al., 2009).

For instance, SMEs might have a greater propensity to adopt simple planning and

control systems, and informal rules and procedures, which can facilitate effective

dissemination of knowledge across the organisation (Lim and Klobas, 2000;

Macpherson et al., 2003). Therefore, based on the outcome of this research, SME

managers can leverage participative executive learning and development to drive

organisational performance by becoming adept at sharing tacit knowledge among

executives and employees (Nonaka and Takeuchi, 1995; Desouza and Awazu, 2006).

Organisational performance has been found to improve where organisations

encourage frequent dialogue and interaction across all levels of the organisation

(Limpibunterng and Johri, 2009; Martin and Ernst, 2005), which underpins the

benefit of encouraging executives in SME firms to engage in participative L & D.

The effects of experiential, structured and strategic executive learning and

development on performance for non-SME firms may be attributable to the extra

resources available to executives in larger firms (McAdam and Reid, 2001). This

extra resource advantage could offer executives greater opportunities, the capacity to

interact more often with customers and engage in a wider range of development

dimensions, which can be leveraged to generate superior products, thereby producing

positive effects on organisational performance (Babbar and Koufteros, 2008;

Maddern et al., 2007; Caemmerer and Wilson 2010).

217

Participative learning and development was the most significant predictor of

performance for SMEs. This might be due to the proximity of key members of SME

management, which enables such learning to occur (Lant and Mezias, 1992). Larger

organisations, due to resource availability, can deploy more sophisticated L & D to

generate organisational performance effects (Belkhodja et al., 2007).

Whilst smaller firms are often considered to have some advantages in terms of

innovation generation capabilities, due to inherent flexibility and lack of inertial

constraints (Sorescu et al., 2003), at the same time, they may be disadvantaged by

insufficient resources and the capacity to respond rapidly to multiple challenges

arising from the external environment (Chandy and Tellis, 2000; Chandy et al., 2003)

This may be compounded by the slack effects associated with resource dependency,

applicable to the executive L & D context, given that larger firms may have the extra

resource capacity to deploy more sophisticated development approaches when

environmental changes occur (Mole et al., 2004). Thus, the superior effects of

executive learning and development on the performance of non-SME firms can be

attributed to the resource constraints that SMEs encounter in terms of limited

investment in cost-intensive learning dimensions, reinforcing the notion that firm

size is indicative of resource capacity and dependency ramifications (Cao et al.,

2009; Hillman, 2005; Hillman et al., 2007; Bowden and Isch, 2013).

As discussed in the literature review, the differential learning orientation attributable

to firm size is corroborated by previous research. Here, it has been evidenced that

SMEs generally lack the internal structures, routines and procedures which larger

organisations utilise to absorb and transform knowledge in order to produce tangible

and intangible organisational outcomes (Zahra and George, 2002; Van Den Bosch et

al., 2003).

In addition, SMEs might often lack the managerial, entrepreneurial and technical

skills required to identify and absorb new knowledge (Yli-Renko, Autio, and

Sapienza, 2001). Moreover, given the skewed influence of owner-managers within

smaller organisations, characterised by reluctance to delegate power and share

knowledge, and autocratic and defensive management behaviours, there is a

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tendency for these factors to impede SMEs from effectively deploying learning and

development dimensions (Jones, 2003). In addition, some commentators have

indicated that firm size has a significant effect on learning orientation (e.g. Belkhodja

et al., 2007). Specifically, Bierly and Daly (2007) reported that smaller firms were

more likely to learn more often from suppliers, while larger firms learn more from

partnership and consultants.

Moreover, Westhead and Storey (1997) intimate that training in small firms is

different from that of their larger counterparts, with the latter likely to depend on

externally-provided training and the former on informal mechanisms. According to

Westhead and Storey (1997), because of resource constraints, small firms depend on

informal work-related training and knowledge, and some SMEs will possibly lag

behind larger counterparts in the adoption of emerging knowledge and technologies,

which can result in diminishing competitive advantage for such firms over time

(Mole et al., 2004).

However, large firms can encounter limitations in executive learning and

development, arising from the complexities of organisational structures, which can

result in slower transformation of learning processes, whilst smaller firms can

disseminate and embed knowledge faster, due to the greater proximity of managers

(Lant and Mezias, 1992).

219

Chapter Six: Conclusions

6.0 Introduction

This chapter concludes the research by addressing the fulfilment of the research

objectives. Subsequently, the research contributions, implications for practice,

limitations, and the implications for future research are presented.

6.1 Achievement of objectives

This research was advanced with three main objectives, the first of which was to

develop an integrated measure of executive learning and development, taking

account of formal and informal domains. This was achieved with cognisance of the

wider executive characteristics, trends in executive development, and various models

of executive development, leading to the four-dimensional executive learning and

development measure (strategic, structured, experiential and participative), espoused

as a broad measure that allows effective assessment of executive learning and

development across sectors and firm size.

Overall, the hypothesis that the effects of executive learning and development on

organisational performance will vary by firm size (SME versus non-SMEs) is

supported in this study. It is therefore, reasonable to suggest that the results reflect

the ramifications of the resource-based view and the resource dependency theories.

This outcome corroborates previous research related to innovation differences by

firm size, where the performance of SMEs lagged behind larger firms, due to limited

financial resources and the inability to recruit specialised staff (e.g. Vossen, 1998).

In this study, statistically significant differences between the service and industry

sectors were observed in learning orientation, as well as in the performance effects of

the learning and development indicators. The overall model fit for the industry sector

was much better than for the service sector across all the performance indicators.

This is an indication that the predictive effects of executive learning and

220

development on organisational performance were better for the industry sector. This

outcome supports the view that learning orientation is likely to differ across

industrial sectors (e.g. Hyland et al., 2000; Dymock and McCarthy, 2006: Khadra

and Rawabdeh, 2006).

This research aimed to evaluate the possible moderating effects of firm size and

sector on the relationship between executive learning and development, and

organisational performance. This outcome supports the arguments in the literature

review that, based on the resource-based view and the resource dependency theories,

smaller firms may lag behind larger firms in performance due to resource constraints

and, more specifically, in terms of the deployment of executive learning and

development dimensions.

Sector differences were also observed, with the industry firms demonstrating better

performance effects of executive learning and development than the service firms. In

sum, although significant differences in the executive learning and development

orientations emerged, strategic learning and development influenced both service and

industry firms, highlighting the importance of this dimension across sectors.

6.2 Research Contribution

The contribution of this work lies in several areas of implementation and empirical

analysis. It contributes to the formulation of a comprehensive executive learning and

development measure, encapsulating both formal and informal dimensions of the

executive/senior management cohort in organisations. Whilst previous researchers

(e.g. Mabey and Ramirez, 2005) have focused exclusively on the performance effects

of executive development, this research makes a theoretical extension by combining

both executive development and executive learning based on Luoma’s (2005) model

of management development. Accordingly, as individual learning positively

correlates with organisational learning, which in turn influences firm performance

outcomes (Goh and Ryan, 2008; Jiang and Li, 2008; Lopez et al., 2005), executives

can contribute towards the improvement of firm productivity. This research has

221

helped to draw out the benefits of blended/integrated design of L & D measures,

given that all four dimensions – strategic, experiential, participative and structured –

contributed in predicting effects on organisational performance. In addition, the

amalgamation of executive learning and development dimensions into a broad

measure (reflecting ambidextrous learning) offers a unique nexus of both concepts

with practical implications.

The moderating effects of firm size/sector on executive learning and development

offer evidence for the contingency theory of SHRM. Thus, this research offers an

important contribution to the SHRM literature, signifying that the contingency

perspective has important ramifications for organisational HRM implementation.

In addition, the moderating effects of the industry sector on executive learning and

development confirm the wider debate of the likelihood of differential learning

orientation across sectors (Hyland et al., 2000; Dymock and McCarthy, 2006). The

moderating effects of firm size on executive learning and development confirmed in

this research substantiates the resource-based view and resource dependency

theories, postulating that larger firms can derive benefits from economies of scale,

whilst their smaller counterparts might be disadvantaged by limited access to critical

resources.

The importance effect of strategic competencies on organisational performance has

been confirmed in this research. In addition, the positive outcome of executive L &

D on the composite performance measure underscores the positive contribution of

informal learning to organisational outcomes, given that strategic and experiential

learning, which are generally informal in nature, were found to generate statistically

significant performance effects.

This research also contributes to the discourse on exploratory factor analysis

research, by corroborating the view of previous researchers (e.g. Costello and

Osborne, 2005) that oblimin, with maximum likelihood, generates results superior to

the varimax rotational models.

222

In sum, this research, given the observed positive effects of executive learning and

development on organisational performance, lends support to a number of theories:

RBV, human capital, resource dependency, dynamic capability, and knowledge-

based theory.

6.3 Implications for Practice

This study presents some practical implications, especially for the design and

implementation of executive learning and development that is aimed at driving

positive organisational performance. The findings indicate that both formal and

informal executive learning mechanisms generate positive effects for organisational

performance. This outcome suggests that organisations need to integrate both formal

and informal dimensions in the design and implementation of executive learning and

development programmes. Particular emphasis could also be placed on mechanisms

that are likely to enhance the acquisition of experiential, participative and strategic

capabilities and competencies, given the positive effects of these mechanisms in this

research. Therefore, a blended learning approach (Bonk and Graham, 2006; Garrison

and Vaughan, 2008; Picciano and Dziuban, 2007; Mitchell and Honore, 2007;

Norberg et al., 2011) of executive learning and development, which integrates

individual, organisational and wider stakeholder effects, should be pursued by

organisations to drive sustainable and superior performance.

Organisations seeking to generate greater returns from executive development

activities can utilise the third layer of Luoma’s (2005) management development

model as good practice to design dimensions. In essence, adopting the integrative

approach to executive learning and development, which involves incorporating both

formal and informal dimensions, is more likely to generate better organisational

performance effects, compared to implementing sporadic and reactive activities.

In addition, the positive effects of executive learning on the composite organisational

performance measure suggest that there are merits in evaluating organisational

performance from both the financial and non-financial perspectives (e.g. customer

223

satisfaction, innovation and employee engagement), as postulated by the competing

values framework (CVF) developed by Quinn and Rohrbaugh (1981, 1983).

Given that the indicators of strategic, experiential and participative learning and

development more closely reflect informal learning practices, this suggests that

executives are more likely to engage in more informal than formal and structured

learning (Brown, 2006). Thus, organisations can focus more on informal executive

learning and development programmes and activities, including networking with

peers, group problem solving, presentations/lectures and coaching, to drive superior

performance. Furthermore, based on the results, as it appears that investment in

performance-oriented executive coaching could lead to improvement in

organisational performance (Thach, 2002; Peterson and Millier, 2005), organisations

are encouraged to include executive coaching as a component of their executive

learning and development programmes.

The results also highlighted strategic executive learning and development as the most

significant predictor of organisational performance, which suggests that

organisations could include this as an important component of their development

programmes to drive superior organisational performance. The rationale for this is

due to the positive effects observed in this research, as well as to the greater

engagement that is likely to arise from senior managers to development programmes

with ‘strategic’ content (Brown, 2006). Strategic learning and development is an

amalgamation of four indicators: strategising, maintaining awareness of business

environment changes, maintaining close links with customers and embedding new

initiatives and changes. Advancing strategic learning as part of executive

development is likely to facilitate the learning transfer to the workplace and

eventually drive positive organisational performance (Brown, 2003).

Firm Sector

Differential effects of executive learning and development on specific organisational

performance variables, by sector (service and industry), were observed in this

research. This highlights the importance of factoring in specific sector effects in the

224

design of executive learning and development programmes, instead of following

generic approaches, which could have limited effectiveness in specific contexts.

For industry sector firms, it might be necessary to build into their executive learning

and development programmes the service logic approach, to drive executives’

learning orientation towards delivering better customer satisfaction (Vargo and

Lusch, 2006). As indicated by Vargo and Lusch (2006), many manufacturing firms

have found a competitive advantage through the adoption of a service-dominated

orientation.

On the other hand, In the design and implementation of executive learning and

development programmes, service sector firms will have to account for the unique

characteristics of services (intangibility, heterogeneity, perishability and simultaneity

of production and consumption), which differentiate them from physical products

(Sundbo, 1997, 2009; Tether and Hipp, 2002; Tether, 2005). Thus, such learning and

development programmes will need to reflect greater integration of learning from

customer experiences, in order to promote the creation of unique value propositions

(Firat and Venkatesh, 1995). This may require executives to increase their proximity

to customers to understand their unique preferences and to generate co-created value

propositions and services, which can generate positive effects on organisational

performance (Thompson et al., 2001).

Firm Size

From the perspective of firm size, the effect of executive learning and development

on organisational performance was better for non-SME than for SME organisations.

Furthermore, the results suggest that the predictive effects of executive learning and

development on organisational performance for the non-SMEs sector was derived

from more than one predictor of executive learning and development (experiential,

structured and strategic), compared with those for SMEs, where a single predictor

was observed. This outcome was attributed to the notion that SME firms may be

disadvantaged by resource constraints and the capacity to respond rapidly to multiple

challenges arising from the external environment (Chandy and Tellis, 2000; Chandy

225

et al., 2003). This situation is often compounded by the slack effects, associated with

resource dependency, applicable to the executive learning and development contexts,

given that larger firms may have the extra resource capacity to deploy more

sophisticated development approaches when environmental changes occur, compared

to smaller firms (Mole et al., 2004). Consequently, non-SME firms can leverage the

superior resource capacity to drive organisational performance by pursuing more

blended and ambidextrous executive learning programmes, integrating both formal

and informal learning approaches, and should account for individual, organisational

and wider stakeholder effects.

On the other hand, due to the resource constraints that SMEs encounter in terms of

limited investment in cost-intensive learning, which reinforces the notion that firm

size is indicative of resource capacity and dependency ramifications (Cao et al.,

2009; Hillman, 2005; Hillman et al., 2007; Bowden and Isch, 2013), SME firms

might be inclined to depend more on informal learning activities.

Specifically, this research reported participative learning (informal) as the only

significant predictor of executive learning and development on organisational

performance for the SME firms. This might be an indication that developing more

participative learning behaviour among executives in the SME sector will generate

positive organisational outcomes. Thus, it might be necessary for executives in

SMEs to encourage and maximise the advantage of the close proximity of key actors

to stimulate learning and development processes in order to generate competitive

advantage for the firm. Consequently, as team-building processes have been found to

be an effective method for improving organisational performance (Bayley et al.,

2007), SME firms should explore different avenues to promote participative learning

and development among executive in SMEs to enhance firm performance.

Finally, due to resource constraints, SMEs are likely to have limited access to

technological and sophisticated HRM support, as explained by the resource-based

view and resource dependency theories. To mitigate such constraints, SME firms

can enhance their executive learning and development capabilities by engaging in

226

partnerships with other players in the industry, such as suppliers and even

competitors, as this approach is likely to involve less capital investment.

6.4 Research Limitations

Whilst this research has generated some interesting outcomes, it does present some

limitations, first of which is the common source data collection, which was partly

mitigated by the outcome of Harman’s common factor tests and other design

dimensions, as previously articulated in the methodology chapter. Another limitation

lies in the use of single-item organisational performance indicators, which was partly

mitigated by anchoring the performance measures over a three-year period (rather

than focusing on a single accounting period) and the amalgamation of these into a

composite measure. Furthermore, the utilisation of subjective, rather than objective,

measurement of organisational performance constitutes another weakness in the

research. In addition, the work could have benefited from further control measures,

such as degree of unionisation, which have been found to influence organisational

performance. Finally, a longitudinal approach would have helped unearth any time-

lag effects of executive learning and development on organisational performance, but

this was not possible through the cross-sectional approach adopted for this study.

Despite its limitations, the present study helps to illuminate our understanding of the

effects of executive L & D on organisational performance. In the following section,

some research avenues are presented to suggest further areas of investigation.

6.6 Recommendations for Future Research

This thesis offers some significant contributions on both the theoretical and practical

fronts. At the same time, it has paved the way for several avenues for future research

on executive learning and development.

Future research can be conducted based on longitudinal research design to capture

the dynamic process of executive learning and development on organisational

performance over a period of time (Crewell, 2008). Advancing the longitudinal

227

research approach allows researchers to measure the processes and patterns of

change, and to capture information on a continuous basis (Kumar, 2005). This

approach can also help to draw conclusions that are more detailed on causal

mechanisms and reveal any potential time-lag effects that might exist between the

implementation of executive learning and development, and the realisation of firm

performance. This approach can also offer insights regarding the speed effects of

executive learning and development on different performance indicators.

Future research should also be advanced based on the same constructs but, instead of

relying on perceptions of organisational performance, the data could be elicited from

existing databases, such as AMEDEUS. In addition, future research should be based

on multi-sources of objective organisational performance measures, instead of

eliciting data from single-sources within organisations. For instance, customer

satisfaction and innovation performance can be collected directly from customers

rather than eliciting the entire data set from executives.

Random sampling, instead of the convenience approach, can be advanced in future

research, to eliminate the possible bias effects of convenience sampling. Moreover,

to eliminate any common methods bias effects, future research should be advanced

with the organisational performance data separated from the executive learning and

development constructs, although the Harman common method test revealed that

common methods issues were not present in this research.

As the results of this research revealed that industry context constitutes a highly

relevant moderator, future statistical analyses should examine the external and

sector-specific factors beyond the service and industry dimensions, focusing on a

specific industry (such as aerospace, car manufacturing or banking) to highlight any

unique features of the executive L & D in specific sectors.

Another theme that could be addressed relates to the centrality of the effects of firm

size on the relationship between executive learning and development, and firm

performance. Further empirical work can be undertaken to validate this outcome

under different research environments (nationally, by sector and internationally).

228

Furthermore, while the results of this research provide insight into relationships at an

aggregated level, customised models should be developed and adapted towards the

individual firm level. In effect, further research can focus on in-depth case studies

and action research, to help open the ‘black box’ on executive learning and

development effects on organisational performance.

Finally, a combined approach, involving both qualitative and qualitative methods

could be advanced to draw out some in-depth knowledge and insight on the effects of

executive learning and development on organisational performance, to extend the

understanding of this subject from both the individual and wider organisational

perspectives.

229

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Appendix A – Summary of Traditional Measures of

Training and Development

Author(s) Research Base Brief

Summary

Journal Measures of

learning and

development

Appleyard and

Brown (2001)

The

relationship

between firm

performance –

along quality

and quantity

dimensions –

and three

components of

the

employment

system: skill

development,

employee

participation in

problem

solving, and

employee

collaboration

Continuous

training of

engineers and

technicians

within well-

functioning

team dynamics

can result in

enhanced

performance,

demonstrated

by lower

defect density.

Industrial

Relations

Average

number of

training days

for new

employees

Number

of training

days in 3

years

304

305

Author(s) Research Base Brief

Summary

Journal Measures of

learning and

development

Wright,

Gardener and

Moynihan(200

3)

Impact of HR

practices and

organisational

commitment on

the operating

performance

and

profitability of

business units

Organisational

commitment

and HR

practices are

significantly

related to

operational

measures of

performance,

as well as to

operating

expenses and

pre-tax profits.

Human

Resources

Manageme

nt Journal

Average

number of

hours for

formal

training per

annum

306

Author(s) Research Base Brief

Summary

Journal Measures of

learning and

development

Guest et al.

(2003)

The

relationship

between HRM

and

performance is

explored in 366

UK companies,

using objective

and subjective

performance

measures and

cross-sectional

and

longitudinal

data

Based on

objective

measures of

performance,

greater use of

HRM is

associated

with lower

labour

turnover and

higher profit

per employee,

but with less

productivity.

After

controlling for

previous

years’

performance,

the association

ceases to be

significant.

Subjective

performance

estimates

indicate a

strong

association

between HRM

and both

productivity

and financial

performance.

The study

fi h

British

Journal of

Industrial

Relations

Percentag

e of staff

trained per

annum

Number

of training

days per

annum for

new

employees

Number

of training

days per

annum for

experienced

employees

Percentag

e of training

associated

with present

job

Percentag

e of training

associated

with future

job

307

Author(s) Research Base Brief

Summary

Journal Measures of

learning and

development

Horgan and

Muhlau (2006)

Test that the

complimentary

effects of high

performance

HR

management

system on

employee

performance is

over and above

the sum of the

effects of five

practices

The high

performance

HR

management

system is the

most effective

form of HR

management

in enhancing.

Second, it

seeks to

demonstrate

that this

superior

effectiveness

is in part

derived from a

complementari

ty between

five HR

dimensions

(Incentives,

Sharing,

Guidance,

Training and

Selectivity).

Internation

al Journal

of Human

Resource

Manageme

nt

Use of

internal

training

Percentag

e of staff

offered on-

the-job

training

Percentag

e of staff

offered off-

the-job

training

Percentag

e of staff

offered

funding for

further

education

308

Author(s) Research Base Brief

Summary

Journal Measures of

learning and

development

Way (2002) Examine how

high

performance

work systems

(HPWS) are

associated with

outcomes that

are key to the

success of

small US firms

Within the US

small firm

sector of the

economy,

HPWS do not

necessarily

produce

outcomes

that exceed the

labour costs

associated

with the use of

these systems.

Journal of

Manageme

nt

Percenta

ge of staff

offered

formal

training per

annum

309

Author(s) Research Base Brief

Summary

Journal Measures of

learning and

development

Gelade and

Ivery (2003)

Examines the

relationships

between HRM,

work climate

and

organisational

performance in

a branch

network in a

retail bank

Correlations

between work

climate and

performance

cannot be

explained by

dependence on

HRM factors.

This is

consistent with

a mediation

model in

which the

effects of

HRM practices

on business

performance

are partially

mediated by

work climate.

Personnel

Psychology

Percenta

ge of staff

certified as

competent in

customer

service

310

Author(s) Research Base Brief

Summary

Journal Measures of

learning and

development

Haung (2000) Examines the

different

approaches to

human resource

management

(HRM)

practices

for business, in

different

performance

categories

Organisational

performance is

significantly

related to the

management

of such human

resource

functions as

planning,

staffing,

appraisal,

compensation,

and training

and

development.

Successful

firms are often

those that

adopt a highly

effective

approach to

the

management

of their human

resources.

Internation

al Journal

of Human

Resource

Manageme

nt

Long/sho

rt term focus

of training

and

development

activities

Manageri

al

involvement

in the

planning of

training and

development

activities

Team/

individual

focus on

training and

development

Value

placed on the

training

development

department

by the firm

311

Author(s) Research Base Brief

Summary

Journal Measures of

learning and

development

Rodriguez and

Ventura

(2003)

Analyses the

relationship

between human

resource

management

systems and

firm

performance,

using the Miles

and Snow

typology

(1984)

Internal or

‘make’, human

resource

system

exercises a

positive effect

on employee

turnover and

overall firm

performance.

However,

compensation

practices

associated

with this

system

produce a

negative effect

on the firm’s

productivity.

There is

limited support

for the theory

that the

influence of

human

resource

systems on

firm

performance is

contingent on

organisational

strategy.

Internation

al Journal

of Human

Resource

Manageme

nt

Emphasis

on long term

development

Degree

of

socialisation

Emphasis

on training

312

Author(s) Research Base Brief

Summary

Journal Measures of

learning and

development

Lee and Miller

(1999)

Examines how

an

organisation’s

commitment to

its employees’

well-being

(OCE) can aid

in the

profitable

execution of its

positioning

strategies

Dedicated

positioning

strategies

appear to be

executed more

effectively

where

organisations

exhibit a high

level of

commitment to

their

employees;

and,

conversely,

OCE is apt to

have a strong

impact on

ROA only in

the context of

a dedicated

(that is,

intensive and

thorough)

positioning

strategy.

Strategic

Manageme

nt Journal

Level of

investment in

employee

education and

competence

development

313

Author(s) Research Base Brief

Summary

Journal Measures of

learning and

development

Faems et al.

(2005)

To assess the

influence of

HRM on

financial

performance:

(1) Determine

the relative

contribution of

different HR

domains to

organisational

performance;

(2) Focus on

the importance

of HRM for

small business

management;

(3) Use

bankruptcy

prediction

models, to

optimize the

conceptualizati

on of financial

performance;

(4) Using

structural

equation

modelling,

capture the

mediating

effect of

operational

performance on

h l i hi

Investment in

HR domains

such as

training and

career and

performance

management

has a positive

and significant

impact on

productivity,

although this

effect does not

seem large

enough

substantially to

influence

higher

profitability

levels.

The

Internation

al Journal

of Human

Resource

Manageme

nt

Existence

of strategic

training plan

Adherenc

e to strategic

training plan

314

Author(s) Research Base Brief

Summary

Journal Measures of

learning and

development

De Pablos

(2004)

Develop a

conceptual

framework

linking

human resource

management,

organisational

learning and

knowledge

management

Human capital,

at the

individual

level has a

direct, positive

and significant

relationship

with the

creation of a

sustained

competitive

advantage.

Human capital

leads to an

increase in

customer

benefits by

affording

organisations

the flexibility

required to

meet changing

customer

needs, as well

as providing

them with the

innovation

needed to

achieve

leadership in

the market.

Journal of

European

Industrial

Training

Level of

internal

learning

Level of

external

learning

Radical

versus

incremental

learning

Speed of

learning

Appendix B – Phase 1 Questionnaire (N150)

Executive Development & Learning Survey

This survey consists of a broad range of measures designed exclusively to evaluate

the learning and development activities of executives and directors. Please allow

approximately 10-15 minutes to completion the survey.

Part A: Questionnaire

Please circle on the scale the extent to which you agree with the following

statements as they apply to your organisation where 1= strongly disagree, 4 = neither

agree nor disagree, and 7 = strongly agree.

Section 1: Experiential Learning and Development

Questions [Taking risk, experimenting, job challenge, learning

situations]

Strongly Strongly

disagree Neutral agree

Executives in our organisation are encouraged to

experiment with new and novel approaches for cost

savings and speedier decision making.

1 2 3 4 5 6 7 1

Although our organisation has set working practices,

executives can change these in pursuit of greater

efficiency if required.

1 2 3 4 5 6 7 2

Executives in our organisation are oriented toward

learning from their experiences, thus permitting

growth, change, adaptation, and creative problem

solving.

1 2 3 4 5 6 7 3

My organisation provides opportunities for executives 1 2 3 4 5 6 7 4

315

to participate in cross-functional projects and stretch

assignments, such as re-organisations, strategic

initiatives, merger integrations, acquisitions targeting,

etc., to broaden their job scope and capabilities.

Executives in our organisation receive support and

encouragement from other peers when presenting new

ideas and initiatives.

1 2 3 4 5 6 7 5

1 2 3 4 5 6 7 6 In our organisation, executives are encouraged to take

risks, venture into unknown territories and experiment

with new ideas to drive efficiencies in processes and

reduce cost.

Section 2: Structured Learning and Development

Questions [Specialist skills building courses, professional

association seminars and coaching]

Strongly Strongly

disagree Neutral agree

Our organisation provides communication and

problem-solving training and development

opportunities for executives.

1 2 3 4 5 6 7 7

Our organisation is highly supportive of executives’

attendance at professional society seminars,

conferences and programmes to enhance their skills

and capabilities.

1 2 3 4 5 6 7 8

Our organisation offers strong support (financial and

non-financial) to executives when they pursue work

and non-work related self-directed studies.

1 2 3 4 5 6 7 9

1 2 3 4 5 6 7 10 Executives in our organisation are offered coaching

support to enhance their personal effectiveness,

leadership skills and achievement of organisational

goals and targets.

316

Section 3: Expansive Learning and Development

Questions [Network ties and reflection] Strongly Strongly

disagree Neutral agree Executives in our organisation are good at networking

with key individuals outside the formal organisational

structure and can exchange ideas for mutual benefit.

1 2 3 4 5 6 7 11

Our organisation frequently promotes informal social

activities for executives to stimulate internal

networking, which helps them to forge informal

relations.

1 2 3 4 5 6 7 12

Executives are encouraged to interact with a wider

stakeholder group – competitors, customers, suppliers,

universities – to acquire and disseminate information

across the organisation.

1 2 3 4 5 6 7 13

Executives have the propensity of reviewing key

decisions and ideas with peers to gain buy-in, support

and feedback.

1 2 3 4 5 6 7 14

1 2 3 4 5 6 7 15 Executives in our organisation are good at learning

from mistakes, and are inclined to initiate new ideas,

even when some ideas have been unsuccessful in the

past.

317

Section 4: Interactive (Participative) Learning and Development

Questions[Teleconferencing, away days, and special task

force assignments]

Strongly Strongly

disagree Neutral agree

Executives in my organisation engage in interactive

activities on a frequent basis such as conference calls,

joint-problem solving, progress review of special projects

inter-functional working groups, etc.

1 2 3 4 5 6 7 16

Away days are a regular component of the development

process for executives in our organisation and serve as a

forum for generating new ideas, solving specific

organisational problems and building new skills and

capabilities.

1 2 3 4 5 6 7 17

1 2 3 4 5 6 7 18 Our organisation has established briefings or programme

to help executives to understand cross-organisational

operational processes and governance arrangements.

Section 5: Self-directed Learning and Development

Questions [Reading specialist books, industry and professional

association magazines, distance and e-learning]

Strongly Strongly

disagree Neutral agree

19 Executives in our organisations tend to refer to various

sources of information, such as specialist books,

industry and professional association magazines,

academic articles, to enhance their learning and

development.

1 2 3 4 5 6 7

20 Executives in our organisation are offered opportunities

to develop new skills via company-sponsored distance

learning and e-learning programmes.

1 2 3 4 5 6 7

1 2 3 4 5 6 21 Our organisation provides a wide range of computer- 7

318

based learning resources (work and non-work related)

aligned to the development needs of executives.

Section 6: Strategic Learning and Development

Questions [Business environment, stakeholder, ethical and

customer

requirements awareness ]

Strongly Strongly

disagree Neutral agree

Executives in our organisation think strategically,

ethically and holistically, encompassing issues of past,

present and future dimensions.

1 2 3 4 5 6 7 22

Executives in our organisation maintain an awareness

of business environment changes and their implications

for the organisation.

1 2 3 4 5 6 7 23

Executives understand the critical success factors for

satisfying stakeholders, and match these with

organisational competences and capabilities.

1 2 3 4 5 6 7 24

Executives maintain close links with customers in order

to understand, attract and satisfy them more effectively

than competitors, by offering differentiated, high

added-value products and services.

1 2 3 4 5 6 7 26

Executives embed new initiatives and changes into our

organisation by taking account of inter-functional and

cross- organisational impact and effects.

1 2 3 4 5 6 7 27

1 2 3 4 5 6 7 28 Executives tend to react rapidly to situations or events

before they degenerate into critical financial,

competitive or leadership difficulties for our

organisation.

319

Section 7: Strategic Alignment of Executive Learning & Development

Questions [Tailoring, strategic capability and influence of

networking information on organisational strategies]

Strongly Strongly

disagree Neutral agree

Learning and development activities designed for

executives are strongly aligned to the short- and long-

term strategic goals of our organisation.

1 2 3 4 5 6 7 29

When strategising and implementing functional and

operational plans, executives in our organisation

integrate, ideas and concepts derived from external

network sources (competitors, industry peers, etc.).

1 2 3 4 5 6 7 30

320

31 Executives in our organisation acquire a greater

proportion of strategic capabilities, ideas and

competencies from informal learning and development

activities than from formal and structured means.

1 2 3 4 5 6 7

About your organisation

Please indicate the number of employees in your organisation

Less

than

100

Part B: Further details

100 -

1,000

1,000 -

5,000

5,000 -

10,000

10,000-

50,000

50,000

-

100,000

Over

100,000

Please indicate the approximate age of your firm

5 – 10

years

10 –

20

years

20 –

30

years

30 –

40

years

over

50

years

Please indicate the geographical location of your organisation

UK US Australasia Africa

0 – 5

days

5 – 10

days

10 – 15

days

over 15

days

321

About Yourself

(Please provide the following information about yourself)

What is your gender?

How many years of executive management experience do you have?

Male Female

0-3 5-10

322

What is your job title/position in your organisation?

10-15 over 15

CEO Top

Level

Executive

Senior

Vice

President

Vice

President

Director

Thank you for participating in the survey and your response is very valuable to us. If

you are interested in receiving a level summary of the survey, please provide your e-

mail address below:

Appendix C – Phase 2 Questionnaire (N222)

Executive Development & Learning Survey

You are kindly invited to participate in this survey aimed at assessing executive

learning and development in organisations. The primary audience are executives and

direct reports with strategic and operational responsibility in organisations. Please

allow approximately 10-15 minutes to complete the survey.

Part A: Questionnaire

Please circle on the scale the extent to which you agree with the following statements

as they apply to your organization, where 1= strongly disagree, 4 = neither agree nor

disagree, and 7 = strongly agree.

Section 1: Experiential Learning and Development

Questions [Taking risk, experimenting, job challenge,

learning situations]

Strongly Stronglydisagree Neutral agree

Executives are encouraged to take risks, venture

into unknown territories, and experiment with new

ideas to drive efficiencies in processes and cost

reduction.

1 2 3 4 5 6 7 1

Executives are encouraged to amend established

organisational practices in pursuit of increased

efficiency and effectiveness.

1 2 3 4 5 6 7 2

323

Executives in learn quickly from past experiences,

thus permitting growth, change, adaptation, and

creative problem-solving.

1 2 3 4 5 6 7 3

1 2 3 4 5 6 4 Executives are given the opportunity to participate

in cross-functional activities and stretch

assignments such as organisational restructuring,

strategic initiatives, merger integrations,

acquisitions targeting, etc., to broaden their job

scope and competencies.

7

324

Section 2: Structured Learning and Development

Questions [Specialist skills building courses, professional

association seminars and coaching]

Strongly Stronglydisagree Neutral agree

The organisation is highly supportive of executive

attendance at professional society seminars,

conferences, and programmes to enhance their skills

and capabilities.

1 2 3 4 5 6 7 5

Executives are offered coaching support to enhance

their personal effectiveness, leadership skills to

facilitate the achievement of organisational goals and

targets.

1 2 3 4 5 6 7 6

1 2 3 4 5 6 7 Executives are offered opportunities to develop new

skills and competencies via bespoke flexible learning

arrangement (including distant learning options)

delivered in partnership with external providers.

7

325

Section 3: Participative Learning and Development

Questions[Teleconferencing, away days, and special task

force assignments]

Strongly Stron ly gdisagree Neutral agree

Executives engage in regular “away day”

programmes which serve as a forum for creating

strategic ideas, generating solutions for specific

organisational problems, and developing

interpersonal capabilities.

1 2 3 4 5 6 78

The organisation organises regular briefings and

activities to help executives understand cross-

organisational operational processes and governance

structures.

1 2 3 4 5 6 79

1 2 3 4 5 6 710 The organisation frequently promotes informal social

activities for executives to stimulate internal

networking, which helps them to forge informal

relations.

326

Section 4: Strategic Learning and Development

Questions [business environment, stakeholder, ethical and

customer requirements awareness]

Strongly Stron lygdisagree Neutral agree

Executives in the organisation strategise taking into

account ethical, holistic, current, and future

implications on the business.

1 2 3 4 5 6 7 11

Executives maintain an awareness of business

environment changes and their implications on the

organisation.

1 2 3 4 5 6 7 12

Executives maintain close links with customers in

order to understand, attract, and satisfy them more

effectively than competitors, often resulting in the

creation of differentiated, high added-value products

and services.

1 2 3 4 5 6 7 13

1 2 3 4 14 Executives embed new initiatives and changes in the

organisation by taking into account inter-functional

and cross-organisational impact and effects.

5 6 7

327

Organisational Performance

Based on the past 3 years’ results, how do you rate your organisation's

Profitability/Financial performance, compared to peers in your primary

industry?

328

Based on the past 3 years’ results, how do you rate your organisation's

Customer Satisfaction performance, compared to peers in your primary

industry?

30 Profitability / financial

performance

Lowest

20%

Next 20%Middle

20%

Next

20%

Top

20%

Based on the past 3 years’ results, how do you rate your organisation's

Product/Service Innovation performance, compared to peers in your primary

industry?

31 Product/ Service Innovation

performance

Lowest

20%

Next 20%Middle

20%

Next

20%

Top

20%

Based on the past 3 years’ results, how do you rate your organisation's

Employee Engagement performance, compared to peers in your primary

industry?

32 Employee Engagement

Performance

Lowest

20%

Next 20%Middle

20%

Next

20%

Top

20%

29 Profitability / financial

performance

Lowest

20%

Next 20%Middle

20%

Next

20%

Top

20%

Based on the past 3 years’ results, how do you rate your organisation's Market

Share growth, compared to peers in your primary industry?

Lowest

20%

Next 20%Middle

20%

Next

20%

Top

20%

33 Market Share Performance

About your organisation

Please indicate the number of employees in your organisation

Less

than

100

Part B: Further details

100 -

250

1,000 -

5,000

5,000 -

10,000

10,000-

50,000

50,000

-

100,000

Over

100,000

Please indicate the approximate age of your organisation

0 – 10

years

10 –

20

years

20 –

30

years

30 –

40

years

over

50

years

329

Please indicate the geographical location of your organisation

UK US Australasia Africa

About Yourself

(Please provide the following information about yourself)

What is your gender?

How many years of executive management experience do you have?

Male Female

0-5 5-10 10-15 over

25

20-15

What is your job title/position in your organisation?

CEO Top Level

Executive

Senior

Vice

President

Director Divisional

Manager

Senior

Management

Middle

Management

Thank you for participating in the survey and your response is very valuable to us. If

you are interested in receiving a level summary of the survey, please provide your e-

mail address below:

330

Appendix D – Summary of original, revised and new

questionnaire items

Experiential Learning and Development

New executive L and D item Origination /source of item

1 Executives in our organisation are

encouraged to experiment with new

and novel approaches for cost

savings and speedier decision

making.

‘We promote risk-taking and

experimentation in our working

methods’ – Spicer and Sadler-Smith

(2006)

2 Although our organisation has set

working practices, executives can

change these in pursuit of greater

efficiency if required.

‘We do have set working practices, but

we can change these in pursuit of

greater efficiency if need be’ – Spicer

and Sadler-Smith (2006)

3 Executives in our organisation are

oriented toward learning from their

experiences, thus permitting growth,

change, adaptation, and creative

problem solving.

‘We were good at learning from

mistakes’ – Rickards et al. (2001)

4 My organisation provides

opportunities for executives to

participate in cross-functional

projects and stretch assignments,

such as re-organisations, strategic

initiatives, mergers integrations and

acquisitions targeting, to broaden

their job scope and capabilities.

‘My company provides opportunities for

top management team members to

participate in crossfunctional projects’ –

Lin and Shih (2008)

331

5 Executives in our organisation

receive support and encouragement

from other peers when presenting

new ideas and initiatives.

‘People here receive support and

encouragement when presenting new

ideas’– Chiva (2007)

6 In our organisation, executives are

encouraged to take risks, venture into

unknown territories and experiment

with new ideas to drive efficiencies

in processes and cost.

‘People are encouraged to take risks in

this organisation’ – Chiva (2007)

Structured Learning and Development

New executive L and D item Origination /source of item

7 Our organisation provides

communication and problem-solving

training and development

opportunities for executives.

‘My company provides communication

and problem-solving training programs

for top management team members’ –

Lin and Shih (2008)

8 Our organisation is highly supportive

of executives’ attendance at

professional society seminars,

conferences and programmes to

enhance their skills and capabilities.

Item developed based on ideas from

Paisey et al. (2007, pp. 380-386), related

to leadership development interventions.

9 Our organisation offers strong

support (financially and non-

financially) to executives when they

pursue work and non-work related

self-directed studies.

Item developed based on ideas from

Paisey et al. (2007, pp. 380-386), related

to leadership development interventions.

332

10 Executives in our organisation are

offered coaching support to enhance

their personal effectiveness,

leadership skills and achievement of

organisational goals and targets.

Item developed based on ideas from

Boyles

(2007, pp. 390-394), related to

executive coaching.

Networking-related Learning and Development

New executive L and D item Origination /source of item

11 Executives in our organisation are

good at networking with key

individuals outside the formal

organizational structure and can

exchange ideas for mutual benefit.

‘Team members were good at mobilizing

help from outside the team’ – Rickards et

al. (2001)

12 Our organisation frequently

promotes informal social activities

for executives to stimulate internal

networking, which helps them to

forge informal relations.

‘My company frequently holds informal

social activities for top management team

members’ – Lin and Shih (2008)

13 Executives are encourages to

interact with a wider stakeholder

group – competitors, customers,

suppliers, universities – to gather

and disseminate information across

the organisation from a centralised

hub.

‘People are encouraged to interact with

the environment: competitors, customers,

technological institutes, universities,

suppliers etc.’ – Chiva (2007)

14 Executives have the propensity of

reviewing key decisions and ideas

with peers to gain buy-in, support

and feedback.

‘The views of staff are regularly sought

on important strategic and operational

decisions’ – Clarke (2005)

333

15 Executives in our organisation are

good at learning from mistakes, and

are inclined to initiate new ideas

even when they have been

unsuccessful in the past.

‘We tended to try out new ideas after

things went wrong’ – Rickards et al.

(2001)

Participative Learning and Development

New executive L and D item Origination /source of item

16 Executives in my organisation

engage in interactive activities on a

frequent basis such as conference

calls, joint-problem solving,

progress review of special projects,

inter-functional working groups,

etc.

Item developed based on ideas from Miller

et al. (2009, p. 100), related to leadership

development interventions.

17 Away days are a regular component

of the development process for

executives in our organisation and

serve as a forum

Item developed based on ideas from Miller

et al. (2009, p. 100), related to leadership

development interventions.

for generating new ideas, solving

specific organisational problems

and building new skills and

capabilities. (New)

18 Our organisation established means

or programmes to help executives

to understand cross-organisational

operational processes and

governance arrangements.

‘My company establishes rules or

programs to help top management team

members understand each other’s

operation processes and job duties’ – Lin

and Shih (2008)

334

Self-directed learning and Development

New executive L and D item Origination /source of item

19 Executive in our organisations tend

to refer to various sources of

information such as specialist

books, industry and professional

association magazines, and

academic articles, to enhance their

learning and development.

Item developed based on ideas from

Miller et al. (2009, p. 100), related to e-

learning.

20 Executives in our organisation are

offered opportunities to develop

new skills via company sponsored

distance learning and e-learning

programmes.

Item developed based on ideas from

Miller et al. (2009, p. 100), related to e-

learning.

21 Our organisation provides a wide

range of computer-based learning

resources (work and non-work

related) aligned to the development

needs of executives.

Item developed based on ideas from

Miller et al. (2009, p. 100), related to e-

learning, and Paisey et al. (2007, pp. 380-

386).

335

Strategic Learning and Development

New executive L and D item Origination /source of item

22 Executives in our organisation

think strategically, ethically and

holistically, encapsulating issues of

past, present and future dimensions.

Item developed based on Thompson and

Cole’s conceptualisation of strategic

competencies: ‘think strategically and

holistically, encapsulating issues of the

past, present and the future’ (1999).

23 Executives in our organisation

maintain an awareness of business

environment changes and their

implications for the organisation.

Item developed based on Thompson and

Cole’s conceptualisation of strategic

competencies: ‘maintain awareness of

environmental changes and their

implications’ (1999).

24 Executives understand the critical

success factors for satisfying

stakeholder and match these with

organizational competences and

capabilities (Thompson and Cole

1999)

Item developed based on Thompson and

Cole’s conceptualisation of strategic

competencies: ‘understand the needs and

expectations of stakeholders and manage

the organisation to meet those which must

be prioritised’ (1999).

26 Executives maintain close

proximity to customers in order to

understand, attract and satisfy them

more effectively than competitors

with differentiated, high added-

value products and services.

Item developed based on Thompson and

Cole’s conceptualisation of strategic

competencies: ‘Get and stay close to

customers – to understand, attract and

satisfy them more effectively with

differentiated, high added-value products

and services’ (1999).

27 Executives embed new initiatives

and changes into our organisations

by taking account of inter-

functional and cross- organisational

impact and effects. (new)

Item developed based on Thompson and

Cole’s conceptualisation of strategic

competencies: ‘Foster internal cross-

functional and cross-business synergies

through co-operation and sharing’ (1999).

336

337

28 Executives have the tendency of

reacting rapidly to situations or

events before they degenerate into

critical financial, competitive or

leadership difficulties for our

organisations (new)

Item developed based on Thompson and

Cole’s conceptualisation of strategic

competencies: ‘Avoid business failures

by becoming and staying crisis averse’

(1999).